O eng, Clemen ; Obeng, Cama a Kwasi; Game e, Pius
A icle
Achie ing ca bon neu ali y in an eme ging oil-p oducing
coun y: Renewable ene gy ansi ion and in e na ional
ade lows in Ghana
Resea ch in Globaliza ion
P o ided in Coope a ion wi h:
Else ie
Sugges ed Ci a ion: O eng, Clemen ; Obeng, Cama a Kwasi; Game e, Pius (2024) : Achie ing ca bon
neu ali y in an eme ging oil-p oducing coun y: Renewable ene gy ansi ion and in e na ional
ade lows in Ghana, Resea ch in Globaliza ion, ISSN 2590-051X, Else ie , Ams e dam, Vol. 9, pp.
1-14,
h ps://doi.o g/10.1016/j. esglo.2024.100244
This Ve sion is a ailable a :
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Achie ing ca bon neu ali y in an eme ging oil-p oducing coun y:
Renewable ene gy ansi ion and in e na ional ade lows in Ghana
Clemen O eng
a
,
*
, Cama a Kwasi Obeng
b
, Pius Game e
c
a
School o Economics, Uni e si y o Cape Coas , Ghana
b
Depa men o Economic S udies, School o Economics, Uni e si y o Cape Coas , Ghana
c
Depa men o Applied Economics, School o Economics, Uni e si y o Cape Coas , Cape Coas , Ghana
ARTICLE INFO
JEL:
F17
F47
Q21
Q41
Keywo ds:
Ene gy ansi ion
Ghana
In e na ional ade
Sha e o low ca bon ene gy
Sha e o enewable ene gy in elec ici y
ABSTRACT
O e he pas decade, clima e a iabili ies ha e eme ged as shaping he dynamics o in e na ional ade. The
ad e se ex e nali ies posed by clima e change equi e a co esponding imp o emen in he p oduc ion o ood,
ade and he adop ion o abundan enewable ene gy esou ces. Ou s udy ocused on e alua ing he impac o
enewable ene gy ansi ion on in e na ional ade lows in Ghana. We employed he dynamics ARDL simula ion
model o analyse ou esul s using da a om a ious ins i u ions. We ound ha ene gy ansi ion using bo h low
ca bon ene gy and enewable ene gy in elec ici y gene a ion by 1% and 5% signi ican ly inc eases he balance
o ade o he 4 h yea a e which ene gy ansi ion dec eases he balance o ade o he 9 h yea . A e he 9 h
yea , ene gy ansi ion by bo h pe cen ages inc eases he ade balance o Ghana. We obse e ha he ene gy
ansi ion by 5% has a highe impac han he ene gy ansi ion by 1%. Addi ionally, i is obse ed ha using he
sha e o enewable ene gy in elec ici y gene a ion has a dec easing a e ela i e o he i s ou yea s. D a ing
enewable ene gy plans such as alloca ion o unds, suppo i e policy amewo ks and incen i es such as g een
inancing, subsidies, and ax incen i es can enhance and de elop enewable ene gy in as uc u e o inc ease
enewable ene gy e iciency and eliabili y o in e na ional ade.
1. In oduc ion
The commencemen o his decade has ca alysed s uc u al changes
in he global ade landscape. Geopoli ical ensions, he a e ma h o he
pandemic, he e ol ing supply chain, and clima e dis up ions a e now
en enched ends, which a e eshaping he dynamics o ade (Obse -
a o y o Economic Complexi y. OEC, 2024). The ad e se ex e nali ies
posed by clima e change and by es ima ion, he wo ld popula ion hi ing
9.8 billion in 2050, pose challenges including ood insecu i y, po e y,
malnu i ion, s ained land esou ces and nega i e en i onmen al
impac . This equi es a co esponding imp o emen in he p oduc ion o
ood by abou 70 % (Uni ed Na ions Economic Commission o A ica
UNECA, 2021), ade and he adop ion o abundan enewable ene gy
esou ces (Cli e al., 2024; Es e ˜
ao &Lopes, 2024). The cu en clima e
c isis equi es mi iga ion s a egies such as enewable ene gy and being
able o ade among coun ies (Mohammed Id is e al., 2023; Pawlak &
Smu ka, 2022). Coun ies a e adop ing app oaches o educing ca bon
emissions and achie ing he Sus ainable De elopmen Goal (SDG) 7.1
and SDG7.2. The demise o unaba ed ossil uels by 2050 was adop ed a
he Con e ence o Pa ies (COP) 28. COP 28 included c edible plans o
an ene gy sys em ha almos o wholly a oids ossil ca bon sou ce
exploi a ion and p oduc ion. These s a egies include enewable ene gy
ansi ion, ans e o g een echnologies, inancial suppo , sus ainable
ag icul u e among o he s. Addi ionally, each coun y submi s i s own
na ional plans o educing emissions, known as Na ionally De e mined
Con ibu ions (NDCs). These plans a e o be upda ed e e y i e yea s o
e lec inc eased ambi ion. The goal is o limi empe a u e ise below
2◦C, and p e e ably o 1.5 ◦C.
Con empo a ily, he e a e conce ns abou a ious dynamics in he
ene gy ansi ion discou se. The issue mos discussed is ene gy ansi-
ion’s ole in achie ing he global a ge o educing wo ldwide mean
empe a u e (Cli e al., 2024; Wei e al., 2023). O he discussions ocus
on he possibili y o ene gy ansi ion o cu b ene gy insecu i y wi hin
and be ween coun ies and egions (Es e ˜
ao &Lopes, 2024; Ha ne &
Tagliapie a, 2020; Jiang &Khan, 2023). The iew is ha he ansi ion
om cu en o e - eliance on ossil uels usage o 100 % enewables is a
* Co esponding au ho .
E-mail add esses: [email p o ec ed],[email p o ec ed],[email p o ec ed] (C. O eng), [email p o ec ed] (C.K. Obeng),
[email p o ec ed],[email p o ec ed] (P. Game e).
Con en s lis s a ailable a ScienceDi ec
Resea ch in Globaliza ion
jou nal homepage: www.sciencedi ec .com/jou nal/ esea ch-in-globaliza ion
h ps://doi.o g/10.1016/j. esglo.2024.100244
Recei ed 24 Feb ua y 2024; Recei ed in e ised o m 1 Augus 2024; Accep ed 4 Augus 2024
Resea ch in Globaliza ion 9 (2024) 100244
A ailable online 5 Augus 2024
2590-051X/© 2024 The Au ho (s). Published by Else ie L d. This is an open access a icle unde he CC BY-NC-ND license ( h p://c ea i ecommons.o g/licenses/by-
nc-nd/4.0/ ).
h ea o ene gy equali y and ene gy secu i y since enewables like sola
and wind a e in e mi en making hem unp edic able and un eliable.
Gi en he pe cep ion ha economic p og ess is closely ied o a o dable
ene gy sou ces, i is challenging o go e nmen s o educe ene gy
consump ion and, consequen ly, make signi ican li es yle changes.
Addi ionally, coun ies a e always willing o ade. Coun ies need o
ansi ion o enewable ene gy by 2050 as adop ed a COP 28 while
ade blocks such as he A ican Con inen al F ee T ade A ea (A CTA)
aim o inc ease ade lows in and ou o A ica. T ade has he po en ial
o e adica e ex eme po e y and p omo e inclusi e and sus ainable
de elopmen (Egbendewe, e al., 2017; Gyam i e al., 2023; Ilechukwu &
Lahi i, 2022).
T ade is he c oss-cu ing means o achie e sus ainable de elopmen
unde SDG 17 (Appiah e al., 2023; Hagos e al., 2023; Wo ld Bank,
2020). Economic in eg a ion emains a ib an pa h o achie e g ow h
and de elopmen (Appiah e al., 2023; Hagos, 2023; Uni ed Na ions
Con e ence on T ade and De elopmen . (UNCTAD), 2020). Howe e ,
wi h he empo a y esu gence in ade olume in 2021 and 2022,
g ow h was une en, which spa ked logis ical challenges and ade dis-
pu es. The yea 2024 is eme ging as a c i ical pass o he global econ-
omy, ma king a po en ial shi in economic policies and pa e ns o
ade. The shi o elec ic ehicles made China o e ake Ge many, he
US, and Sou h Ko ea in expo s as he elec ic ehicle con inues o g ow
a double-digi a es in 2023 (IEA, 2024). The e was a 3 % g ow h in he
ene gy sec o wi h he global elec onic and elec ical ma ke s
expanding by 8.2 % (OEC, 2024). Despi e his, SSA accoun s o a small
sha e o he global commodi y ade and also has he lowes in a e-
gional commodi ies ades (16 % e se 17 % o Sou h and Cen al
Ame ica, 42 % o No h Ame ica, 62 % o he Eu opean Union (EU),
and 64 % o Asia) (Da is, 2016). Ne e heless, se e al egional eco-
nomic communi ies ha e been es ablished such as Economic Commu-
ni y o Wes A ican S a es (ECOWAS), Cen al A ican Economic and
Mone a y Union (CAEMU), Sou he n A ican De elopmen Communi y
(SADC), Common Ma ke o Eas e n and Sou he n A ica (COMESA)
and he ecen A CFTA, which is expec ed o boos ade by 52 %
(Appiah e al., 2023; Hagos, 2023; Uni ed Na ions Economic Commis-
sion o A icaUNECA, 2017). These ade blocks aim o acili a e goods
and se ices mo emen s be ween coun ies and o enjoy economies o
scale.
Inc ease in expo capaci ies o he global sou h coun ies such as
Ghana is conside ed c ucial o he p omo ion o sus ainable de elop-
men , po e y educ ion, and globalisa ion (Wo ld Bank, 2020). Ghana
eco ded a su plus me chandise ade o 43.54 % in 2022 and o eign
ade o 58 % o GDP in 2021 (Wo ld Bank, 2022). Acco ding o WTO
da a, in 2021 Ghana’s expo ed goods we e US$14.73 billion and im-
po ed goods we e US$13.63 billion. Howe e , Ghana expo ed US$9.17
billion wo h o se ices while impo ing US$12.34 billion wo h o
se ices. In Ma ch 2022, he me chandise ade su plus eached an all-
ime high o US$676.21 million (Bank o Ghana [BoG], 2023). T ade
can posi i ely in luence p oduc i i y, p oduc ion g ow h and quali y.
This is mos ly in luenced by ade policies, including speci ic a i s,
quali y s anda ds, incen i es a ailabili y, es ic ions, echnical e-
qui emen s, and bila e al and egional ade ag eemen s (OECD, 2014;
Pun hakey, 2020). Clima e-sma ade such as he EU’s Ca bon Bo de
Adjus men Mechanism policies and openness o ade a e c i ical o
educing emissions and po e y. The Russia-Uk aine wa has e isi ed
he impo ance o ene gy ansi ion on economies (Genc &Kosempel,
2023).
Ghana’s ene gy ansi ion plan is se o achie e ne ze o by 2060
d i en by he mal, hyd o and o he enewables in he elec ici y gen-
e a ion mix. Renewable ene gy, ba e y elec ic ehicles, clean cooking
s o es and low-ca bon hyd ogen would co e 90 % o his a ge ed
aba emen (Sus ainable Ene gy o All. SE o ALL, 2023). The en isioned
ene gy ansi ion is expec ed o mee elec ici y demand o
380,000GWh. A di e si ied ene gy mix includes 21GW o enewable
ene gy wi h a o dable gene a ion cos s below 4.5 cen s/kwh in 2070
(Minis y o Ene gy, 2022). Emissions would be educed by 70 %, and
enewables in he powe mix by 45GW gene a ion capaci y om sola
PV, nuclea , on–and o -sho e wind, geo he mal, and hyd opowe . The
cu en ins alled capaci y is 5194 MW wi h a 25 % ese e ma gin
(Ene gy Commission, 2024). Excluding hyd o, enewable ene gy gen-
e a es 117 MW. Ghana plans o achie e uni e sal ene gy access by 2030.
Acco ding o he minis y, ene gy sel -su iciency, low- isk access o
supplies and sys em s abili y will ensu e eeing-up g ea e oil and gas
sha e o Ghana’s consump ion o expo by 90 % unde Ne Ze o
(SE o ALL, 2023). This is based on he ca bon con en o p oduc s
expo ed o he EU om non-EU coun ies. S udies asse ha h ough
enewable ene gy, coun ies can di e si y hei economies, c ea e jobs,
and enjoy s able ene gy p icing while easing impo dependence (Rabbi
e al., 2022; Uni ed Na ions, 2022). Global luc ua ing oil p ices and
s uc u al changes in ene gy policies added alue o ade bu in o-
duced cos ly noise in o he pic u e o o e all global ade (OEC, 2024).
By a hough ul mul i ace ed associa ion among and be ween he SDGs
and hei se a ge s, esea che s and academia can be e suppo pol-
icymake s o hink analy ically abou he in e ac ions be ween a ious
SDGs. This includes how ac i i ies o achie e one goal would a ec o he
goals be ween and wi hin sec o s (Bisaga e al., 2021; Fuso Ne ini e al.,
2018; Nilsson e al., 2016).
The main objec i e o ou s udy is o e alua e he impac o enew-
able ene gy ansi ion on in e na ional ade lows in Ghana. Speci -
ically, we analyse he links be ween SDG7.2 and in e na ional ade
lows. Gi en ha he associa ed cos o enewable ene gy adop ion is
alling (In e na ional Renewable Ene gy Agency. (IRENA), 2020) and
hence, ein o cing he expec a ion o swi ch o enewables om con-
en ional ossil uels, we analyse how enewable ene gy sha e in Gha-
na’s ene gy mix a ec s impo s and expo s. The p ices o sola PV
modules ha e declined by almos 80 % and wind u bine p ices ha e
educed by abou 30 o 40 % (In e na ional Renewable Ene gy Agency.
(IRENA), 2020). I is impo an o no e ha he lip side o egional
consolida ion in 2023 esul ed in a su ge in p o ec ionism. De eloping
coun ies ha e always been es ic ed by he Wo ld T ade O ganisa ion
and o he mul ina ional o ganisa ions o de elop capaci ies o g een
echnologies p oduc ion (Acheampong &Tyce, 2024; Lewis, 2014). Ye ,
he US and he EU ha e launched Ne Ze o ac s. This uels g een p o-
ec ionism ha cons ains indus ialisa ion e o s o he Global Sou h
economies (Acheampong &Tyce, 2024). The impo an me ic o non-
a i measu es ose by 40 % (OEC, 2024). Non- a i de ensi e mea-
su es signi y ends owa ds bols e ing domes ic indus ies and en o c-
ing en i onmen al s anda ds a he expense o ee ade, whe e policy
measu es also unc ion as economic posi ioning ac ics.
The policy domain mos likely o d i e he dynamics o ade will be
he en i onmen . Sus ainabili y will become mo e in eg al o ade
s a egies. The e will be an inc ease in eco-cen ic ade ag eemen s,
ca bon a i s and simila ini ia i es e lec ing he impe ec bu ne
posi i e global commi men o add essing clima e change. Ex an li e -
a u e cau ions ha de eloping coun ies will be hea ily impac ed by he
Ca bon Bo de Adjus men Mechanism o he EU as hey will ind i
challenging o s ay ahead o swi ly changing ini ia i es and go g een
quickly enough o emain compe i i e (Acheampong, &Tyce, 2024;
Eicke e al., 2021; Pe dana &Vielle, 2022). Fas -mo ion con inen al d i
is he wa chwo d o ade s a egies adap a ion o an inc easingly
di ided wo ld o sh inking demand and heigh ened economic ensions.
Also, as an expo e o ossil uel, he ansi ion o abundan enewable
ene gy sou ces on in e na ional ade could be mixed and wo h
examining o a coun y like Ghana.
The e a e se e al s udies on ene gy as well as on ade dimensions.
S udies (e.g., G een ille e al., 2017; Kowalski e al., 2015; Pun hakey,
2020; Webbe &Labas e, 2010) mainly ocused on he impac s o ade
policies on global alue chain pa icipa ion, wi h some pe iphe al
analysis o o eign di ec in es men (FDI) and in es men policies.
Thei hough ul s udies comple ely a oided enewable ene gy and
ade. O he s udies ha e a emp ed o e eal he impac s o ade
C. O eng e al. Resea ch in Globaliza ion 9 (2024) 100244
2
p e e ences on ecei ing egions such as SSA, ECOWAS, CAEMU e c. (e.
g., Didia, e al., 2015; Haile e al., 2017) while s udies such as Egben-
dewe e al. (2017) analysed in a- egional ade on ood secu i y. Aki-
nyemi e al. (2017) in es iga ed ene gy ansi ion in A ica and he
associa ed ade-o s and syne gies ela ing o ade and ene gy secu i y.
Schola ly wo ks such as Hea d e al. (2017); Jacobson e al. (2013); and
Lo us e al. (2015) ha e been done on he easibili y o enewable en-
e gy sou ces. A onso e al. (2021); Li e al. (2021); Sil a e al. (2012)
explo ed he ela ionship be ween enewable ene gy sou ces and eco-
nomic g ow h. These insigh ul s udies ocus on economic g ow h,
speci ically agg ega ed GDP. Ye , li le is known abou he e ec s o
enewable ene gy policies on ade lows. The s udy close o ou s udy is
Mohammed Id is e al. (2023) and Ilechukwu and Lahi i (2022) who
e alua ed he implica ion o inc easing enewable ene gy sha e o in-
e na ional ade o OECD and 152 coun ies espec i ely. To ill his
oid, ou s udy expands on he s udy by Mohammed Id is e al. (2023)
and Ilechukwu and Lahi i (2022) and con ibu es o he deba e on he
e ec s o enewable ene gy ansi ion on ade. Mac oeconomic de el-
opmen including ade emains an impo an policy goal because o i s
abili y o mo e people ou o po e y. This s udy aids in opening mo e
domes ic oppo uni ies o expo p omo ion and modi ica ions ha pu
Ghana in a posi ion o eap mo e bene i s om he enewable ene gy
ansi ion.
2. Rela ed li e a u e
2.1. Ene gy ansi ion dynamics
The g owing ends in G een House Gas (GHG) emissions and he
es ic ions on pe oleum p oduc ion adop ed a COP28 will esul in a
as e ene gy ansi ion. Many coun ies expo ing oil and companies
ha p oduce oil will shi hei a en ion om uels domina ed by ossil
o ze o o low-ca bon emission sou ces o ene gy (Bedani e al., 2020).
Se e al o ganisa ions p o ide consensus o ecas s ha enewables sha e
in he ene gy mix will ise in he u u e (Fa ouh e al. 2019). The ene gy
ansi ion is d i en mos ly by changes in echnology, he desi e o
educe cos s and ine iciency, popula ion and economic g ow h, and he
exhaus ion o exis ing ene gy esou ces (Nwane o e al., 2018). In he
in e ening ime, ca bon p icing and he EU’s Emission T ading Scheme
policies a e also being de eloped o a g adual ene gy shi o low o
ze o-emi ing ca bon sou ces (Johns one e al., 2021). Howe e , he
ene gy ansi ion equi es a huge in es men o capi al and esou ces
(Sol´
e e al., 2018).
Consequen ly, he e a e in icacies in he ene gy ansi ion and he
p ocesses a e beyond jus he eplacemen o one sou ce o uel ( ha is,
ossil uels) wi h ano he ene gy sou ce ( ha is, enewables). Ne e -
heless, ce ain Asian na ions, such as China and India, a e de eloping
ene gy s a egies ha ackle bo h ai quali y and emissions issues while
simul aneously accommoda ing he an icipa ed g ow h in ene gy e-
qui emen s which can boos ade. China has p io i ised using na u al
gas in displacing esiden ial and comme cial hea ing by using coal. Also,
he e has been a change in he US s a e emissions commi men (John-
s one e al., 2021). The dynamics o he ene gy ansi ion ha e ele a ed
ce ain global impo an ques ions o pe oleum and ade. Johns one
e al. (2021) discussed how oil and gas indus ies can na iga e a
changing s a egic landscape while s ill gene a ing e u ns o hei
sha eholde s. Ne e heless, ce ain oil and gas companies a ound he
wo ld a e e o ing in di e en means. These include di e si ica ion o
business models, p o isions o suppo o he g ow h o deca boniza ion
echnologies such as cap u e and s o age, e-examina ion o geopoli ics
and geog aphy o educe exposu e, and adop ion o an en i onmen ha
ocuses on clima e and social go e nance in o business models.
SDGs 7 and 13 as well as COP28 p o ide a amewo k o all coun-
ies in he wo ld o make commi men s owa ds less CO
2
pollu ion and
ze o ossil uels. Fa ou ably, enewables cos s a e alling (IRENA, 2020)
ein o cing he expec a ion o swi ch o enewables om con en ional
ossil uels. Sola PV module p ices ha e declined by almos 80 %, while
wind u bine p ices ha e educed by abou 30 o 40 % (IRENA, 2020).
Shown in Fig. 1, he S a ed Policies Scena ios (STEP) and Announced
Ne Ze o pledges (NZE) would inc ease enewables om 12 % o 35 % in
he Announced Pledges Case (APC) o he o al supply o ene gy in 2050.
Sou ces o enewables would each no el le els as indica ed in he APC.
This would inc ease om 30 % in 2020 o 70 % in 2050 o he o al
supply o elec ici y, while he e would be an inc easing dec ease in
coal. Nuclea powe and enewables a e going o displace he use o
ossil uels in he NZE.
This causes he ossil uel sha es o dec ease om 80 % o 20 % by
2050 and enewables would be dominan in he powe sec o . Mo e han
66.67 % o ene gy supply would be om bioene gy, sola , geo he mal,
wind, hyd o-ene gy, and sola . The capaci y o sola PV would ise by
abou 20- old by 2050 while wind would be abou 11- old. Fossil uels
will decline by abou 80 % o 20 % in 2050. The emaining ossil uels in
2050 will be u ilised o p oduce plas ics and in CCUS acili ies (IEA,
2021).
2.2. E ec s o enewable ene gy on ade
Empi ically, Wazi i e al. (2018) analyse he impac o inc eased
enewable ene gy consump ion in ad anced coun ies wi h high income
(NEICs) on Nige ia’s expo s o pe oleum. Thei esul s indica ed ha
he inc eased consump ion o enewable ene gy in de eloped NEICs
ad e sely a ec s Nige ia’s expo s o oil and gas, leading o a signi ican
dec ease in e enue gene a ed om hese expo s. Onyije e al. (2018)
e eal ha Nige ia’s oil and gas expo s may encoun e in ense
compe i ion in he in e na ional oil ma ke .
Using p oduc ion, Hoang e al. (2020) ind a posi i e co-mo emen
be ween indus ial p oduc ion and consump ion o enewable ene gy.
Simila ly, Bilgili, (2015) inds ha he consump ion o enewable ene gy
has posi i e e ec s on indus ial p oduc ion in he US. Howe e , Xie
e al. (2021) ind ha he ela ionship be ween ene gy consump ion
ansi ion and p oduc i i y is non-linea . Tha is, ei he oo low o high
consump ion deg ee o ene gy ansi ion does no enhance p oduc i i y.
S ¨
ockl e al., (2021) ind a signi ican deg ee o unce ain y when i
comes o p edic ing u u e oil demand. In he same ein, B adshaw e al.
(2022) indica e ha he shale e olu ion and he dec easing cos s and
swi adop ion o enewable ene gy a e es ablishing he g oundwo k o
a new oil landscape ha poses a challenge o he economic well-being o
oil-expo ing na ions. The s udy also e eals ha u u e oil demand
dynamics exhibi conside able unce ain y, p esen ing a compa a i e
e alua ion o he wo ld’s majo oil expo e s, speci ically Russia and
Saudi A abia. In Khan and Shaheen’s (2020) s udy, he au ho s e eal a
s a is ically signi ican , albei small, nega i e elas ici y be ween
enewable ene gy consump ion and he demand o impo ed c ude oil
in India, China, and Japan. Howe e , he subs i u ion e ec is ound o
be bo h s a is ically insigni ican and small o he US.
These imp essi e s udies ha e analysed he e ec o enewable en-
e gy consump ion on he pe oleum subsec o in ad anced pe oleum
economies wi h li le a en ion paid o ade. Addi ionally, he analyses
a e made on he pe oleum impo s by he impo ing coun ies. The use
o pe oleum impo alues may be misleading since he impo ing
coun ies always impo om di e en coun ies and he e o e he an-
alyses may be e oneous. Based on his gap in he exis ing li e a u e, we
p opose he ollowing hypo heses:
Fi s hypo hesis: H1: ene gy ansi ion signi ican ly a ec s he bal-
ance o ade.
Second hypo hesis: H2: ene gy ansi ion signi ican ly inc eases bo h
mechanised non-oil expo s and impo s.
In in e na ional ca bon ma ke s, ce ain na ions engage in he pu -
chase and sale o emission educ ion c edi s. This makes i possible o
na ions o each hei ca bon educ ion goals mo e economically. The
exchange o ca bon c edi s has he po en ial o impac in e na ional
collabo a ion and economic ies. Addi ionally, di e en na ions
C. O eng e al. Resea ch in Globaliza ion 9 (2024) 100244
3
implemen di e se policies and egula ions o p omo e o hinde he
ene gy ansi ion. These policies can a ec ade by in luencing he
compe i i eness o ce ain indus ies, c ea ing ba ie s o en y, o
p omo ing in e na ional coope a ion in he de elopmen and deploy-
men o clean ene gy echnologies. We assume ha he alling cos o
enewable ene gy ansi ion makes expo s mo e compe i i e so much
o eign exchange is gene a ed o inance impo s. This is con a y o he
abso p ion app oach heo y, which s a es ha an economy has a de ici
i people abso b mo e han hey p oduce.
3. Me hodology
3.1. Theo e ical model speci ica ion
Following he wo ks o Golds ein and Khan (1985); and Rose and
Yellen (1989), ou s udy adop s he Impe ec T ade Subs i u ion (ITS)
model. This model is a ade model o wo coun ies engaging in ade.
This model assumes ha goods p oduced domes ically and hose ha a e
impo ed a e impe ec subs i u es. The model supposes ha when i
comes o he olume o goods impo ed by ci izens o he domes ic
economy, he e is a posi i e co ela ion wi h domes ic income and a
nega i e co ela ion wi h impo p ices ela i e o o he coun ies.
Likewise, he quan i y o goods and se ices ha o eign economies
impo om he domes ic economy is di ec ly associa ed wi h he in-
come o hose o eign economies and shows a nega i e co ela ion wi h
ela i e p ices. The ITS model can, hus, be s a ed as:
Qdm = (Y,pm)(1)
Q*
dm = (Y*
,P*
m)(2)
whe e Qdm(Q*
dm) he amoun o goods impo ed by he domes ic ( o eign)
economy, and Y(Y*)deno es he income le el measu ed in domes ic
( o eign) ou pu . The ela i e p ice o impo ed goods in he domes ic
economy is deno ed by pm, and P*
m ep esen s he co esponding ela i e
p ice o impo s ab oad. Models (1) and (2) a e he Ma shallian demand
unc ions, which a e cha ac e ised by posi i e ela i e income elas ici-
ies and nega i e p ice expec a ions.
Acco ding o Rose and Yellen’s (1989) pe spec i e, he supply o
expo s is hea ily in luenced by he p ice compa ison be ween expo -
able goods and o he i ems as indica ed in he model:
Sqx = (px)(3a)
S*
qx = (P*
x)(3b)
whe e he equa ion desc ibes he expo om ei he domes ic o o eign
economy exp essed as Sqx(S*
qx); he ela i e p ices o expo s a e
exp essed as he a io o he p ice o expo ed goods in domes ic cu -
ency, ps o he domes ic p ice le el (p), deno ed as px;likewise, he
ela i e p ice o expo om he o eign economy is ep esen ed as px,
which is calcula ed as P*
xdi ided by P*.
The domes ic economy’s ela i e impo p ices can be exp essed as:
pm=E×P*
x
p=(E×P*
x
p)×(P*
x
p)≡q×P*
x(4)
whe e he exchange a e (nominal) is deno ed E; acco dingly, he do-
mes ic cu ency o o eign exchange and q(q=E×P*
x
p)exp esses he
exchange a e ( eal). In he same way, we exp ess he ela i e p ice o
impo s as:
P*
m=P*
x
p
A he poin o balance, he quan i ies o goods exchanged and he p ices
o expo s in each coun y a e de e mined by he condi ions ou lined in
Equa ions (5) and (6)
Qdm =SQX (5)
Q*
dm =S*
QX (6)
=Rose and Yellen (1989) asse ha ade should no essen ially be
equal o ze o when capi al lows a e p esen . Model (1) —(7) could be
calcula ed o he impo and expo le els and he ela i e p ice a ios,
which a e deno ed as P*
xand Px, by conside ing he di e se ac o s and
de e minan s ha would in luence impo demands domes ically. In
achie ing ou objec i e, ou s udy analyses he e ec o enewable en-
e gy ansi ion on ade. Following he li e a u e (e.g., Ren e al., 2021),
we p oxy ene gy ansi ion wi h he sha e o enewable ene gy
consump ion.
3.2. Model simula ion using he dynamic ARDL model
Besides unde s anding he o e all impac o a shock, which is indi-
ca ed by he long- e m mul iplie , i is o en aluable o de e mine he
ime i akes o speci ic e ec s o he shock o ade o o quan i y he
ex en o which he shock has dissipa ed a e a ce ain numbe o pe-
iods. The median and mean o he lag dis ibu ion o exogenous a i-
ables gi e s a is ics abou he adjus men pa e n a se ies dependen
a iable makes o disequilib ium. Again, o o e come he p oblem o
poin es ima e, inc eased emphasis has been placed on e alua ing he
ex ensi e se ies o subs an i e implica ions om hei s a is ical models
in ecen imes among economis s and social scien is s. This has been
mainly use ul in O dina y Leas Squa e (OLS) models wi h au o e-
g essi e p ocesses. King e al. (2000) sugges ha echnological
Fig. 1. To al Ene gy Supply by Sou ce in STEPS and APC. Sou ces: IEA (2021).
C. O eng e al. Resea ch in Globaliza ion 9 (2024) 100244
4
ad ancemen s in compu ing powe ha e b ough abou a new e a o
engaging in simula ion-based app oaches. To comp ehensi ely analyse
he subs an i e e ec s, i is necessa y o conside a ious quan i ies o
in e es , including he long- e m e ec s, as well as median and mean lag
leng hs as asse ed by De Boe and Keele (2008). In AR models, he mos
e ec i e app oach o obse e he long- e m e ec s o exogenous a i-
ables is o simula e p edic ed alues and con idence in e als o speci ic
scena ios ac oss a designa ed numbe o ime in e als.
Fo his s udy, we employ he dynamic simula ion ARDL model wi h
coin eg a ion a iables en enched in a VAR ime se ies (Jo dan &
Philips, 2018; Johansen, 1988). Applying dynamic ARDL simula ions
has gained ecogni ion, especially, in analyses o ene gy, heal h and
en i onmen al economics. The model algo i hm is aluable o coin e-
g a ion, and sho and long- un equilib ium ela ionships in bo h le el
and di e ences (Sa kodie &Owusu, 2020). The ad an age o he dy-
namic ARDL simula ions is ha i has a isualisa ion in e ace o
examining he likely coun e ac ual a ia ion in he an icipa ed adjus -
able based on he concep o ce e is pa ibus (Sa kodie &Owusu, 2020).
The applica ion o he no el dynamic ARDL simula ion ollows simple
bu echnical guidelines. The ARDL bound es ing p ocedu e u ilised in
he dynamic ARDL simula ion necessi a es a s ic I (1) dependen a -
iable (Jo dan &Philips, 2018; Sa kodie &Owusu, 2020). Thus, he only
p obable pa icipan o coin eg a ion is an endogenous a iable ha is I
(0).
The me hod is conside ed o e alua e he e ec s o a g oup o e-
g esso s e ec s on a dependen a iable wi h measu emen a iables
ha a e aken in isola ion o e ime. Tha is a single equa ion model
amewo k. Con e sely o OLS, bo h he lagged and cu en alues o
eg esso s a e aken in o accoun in an ARDL amewo k and he
assessed e ec on he dependen a iable can be ei he obse ed s eadily
on u u e ime s eps o ins an aneously (Shabbi e al., 2021). Dynamic
ARDL simula ion echniques a e being used in many wo ks o cap u e
shocks in clima ic and socioeconomic indica o s (Sa kodie &S ezo ,
2018; Sa kodie &Owusu, 2020; Shabbi e al., 2021). Ou s udy gi es
speci ics based on policy inpu s in accoun ing o po en ial shocks owing
o he cu en ene gy ansi ion o enewables. The s udy selec s he
eg ession models u ilising dynamic simula ions ARDL model ia 1000
simula ions o he ec o o pa ame e s om a mul i a ia e no mal
dis ibu ion.
The empi ical model o ou ade a iables is:
yi =ai+a2REC +λ2REC −1+λ3BʹQ +e (7)
whe e y ep esen s ou ade a iables o he ARDL simula ion analyses
and BʹQa e he con ol a iables. Ou ade a iable includes he bal-
ance o ade, expo s and impo s o ag icul u al and indus ial sec o s
p oduc ions. Ghana in i s Na ionally De e mined Con ibu ions (NDCs)
plans o achie e 10 % o enewable ene gy pene a ion in i s ene gy mix
by 2030 and double ene gy e iciency by 20 % (MESTI, 2021). Ou
s udy, he e o e, s a es he business-as-usual o be 1 % and apid an-
si ion o be 5 % annually o hese a ge s.
3.3. Da a sou ces
We used seconda y mon hly da a se ies om he Minis y o Finance
(MoF), he Bank o Ghana (BoG), and he Ene gy Commission o Ghana.
The mon hly da a se ies was om Janua y 2015 o Ap il 2023 due
mainly o a ailabili y. Da a on me chandised ade lows, exchange
a es, and commodi y p ices such as in e na ional gold and cocoa p ices
we e ob ained om he BoG. We sou ced da a om he Minis y o
Finance on ene gy unds, subsidies, non-oil GDP and nominal GDP. Da a
on ene gy ansi ion, he sha e o hyd o in elec ici y gene a ion, he
sha e o low ca bon in ene gy, expo and impo s o elec ici y, and
enewable ene gy sha e we e ob ained om he Ene gy Commission o
Ghana (see Appendix A). We ha e p o ided he summa y s a is ics in
Table 1.
F om Table 1, he mean o me chandised expo s is US$1181.596
million wi h a minimum o US$696.32 and a maximum o US$1928.93.
This implies ha he a e age o he me chandised expo s is US
$1181.596. The a e age o elec ici y expo s is 805.53GWh while he
a e age o me chandised impo s is US$1103.359 million. This is
smalle han he me chandised expo s by US$78.237 million. Howe e ,
he minimum alue o me chandised impo s is g ea e han he mini-
mum alue o me chandised expo s bu he maximum alue is smalle
han ha o he me chandised expo s. This means ha Ghana expo ed
me chandised goods mo e han impo ed me chandised goods by 6.6 %.
This is d i en mainly by c ude oil expo s. This is because, wi hou c ude
oil, Ghana expo ed US$3.57 billion wo h o c ude pe oleum and im-
po ed US$1 billion in 2021 acco ding o OEC (2024). This is no su -
p ising since Ghana was he highes global impo e o used clo hing (US
$214 million) in 2021. I is wo h no ing ha he dispe sion o
me chandised expo s (US$224.275 million) is g ea e han ha o
me chandised impo s (US$113.766). Fo non-oil impo s, he a e age is
US$889.876 million. This implies ha , on a e age, Ghana impo s US
$213.483 wo h o c ude oil. This is mo e han 19.3 % o me chandised
impo s. The ade balance has, on a e age, US$78.237 million wi h a
minimum alue o nega i e US$665 million and a maximum alue o US
$666.99 million. This implies ha he e some ce ain yea s ha Ghana
impo s mo e han expo s.
Addi ionally, he a e age exchange a e is GHȻ5.402 pe US$ wi h a
minimum o GHȻ3.219 and a maximum alue o GHȻ13.073. These
show ha he Ghanaian cedis has been dep ecia ing agains he US$ by
mo e han 10 imes. This indica es he weakes o he Ghana cu ency in
in e na ional ade. The ene gy und has a mean o GHȻ4.097 million
wi h a minimum alue o GHȻ0.937 million and a maximum alue o
GHȻ6.10 million while subsidies ha e a mean alue o GHȻ2.28 million
wi h a minimum alue o GHȻ9.626 million and a maximum alue o
GHȻ14.2 million. In he same pe iod, economic ac i i y has a nominal
g ow h a e o 12.213 % wi h a minimum g ow h a e o nega i e 1.71 %
and a maximum g ow h a e o 35.5 %. This implies ha Ghana some-
imes has a nega i e g ow h a e which mus be a conce n o policy-
make s o add ess. An a e age g ow h a e o 12 % by all s anda ds is
good bu o a coun y s uggling o c ea e jobs o i s you h and
Table 1
Summa y s a is ics o he a iables.
Va iable Desc ip ion o a iables Obs Mean S d. de . Min Max
Me chandised expo s Me chandise Expo s in US$ Millions 100 1181.596 224.275 696.32 1928.93
Elec ici y expo GWh Elec ici y Expo (GWh) 100 805.53 461.302 249 1855
Me chandised impo s Me chandise Impo s in US$ Millions 100 1103.359 113.766 882.37 1530.28
Nonoil me chandised impo s Me chandise Impo s_Non-Oil in US$ million 100 889.876 96.399 635.14 1212.2
Me chandised ade balance Me chandise Expo s Less Impo s T ade Balance in US$ Millions 100 78.237 232.462 −665 666.99
Sha e o enewable in elec ici y Sha e o elec ici y by Hyd o (%) 100 60.758 17.440 34.448 91.725
Sha e o low ca bon ene gy Sha e o low ca bon ene gy (%) 100 6.497 1.228 3.71 8.32
Exchange a e S anda d local cu ency uni s pe US$ 100 5.402 1.875 3.219 13.073
Ene gy und Ene gy und in GHȻ100 4,096,802 1.00E+07 93,712 6.10E+07
Subsidies Subsidies in GHȻ100 2.38E+07 1.77E+07 9,625,973 1.42E+08
Nominal g ow h BoG Composi e Index o Economic Ac i i y (Nominal G ow h) (%) 100 12.213 6.011 −1.71 35.5
C. O eng e al. Resea ch in Globaliza ion 9 (2024) 100244
5
eme ging as a c ude oil p oduce , i is no encou aging. The e was a ime
in ime in 2013 when Ghana expe ienced a g ow h a e o mo e han 13
% and was he leading economy in Wes A ica and A ica by ex ension.
These cu en igu es show ha Ghana is expe iencing a dec easing
g ow h a e. We measu e ene gy ansi ion by wo key a iables. These
a e he sha e o enewable ene gy in elec ici y gene a ion and he sha e
o low-ca bon ene gy in ou ene gy sec o . F om Table 1, on a e age, he
sha e o enewable ene gy is 60.758 % wi h a minimum alue o 34.448
% and a maximum alue o 91.725 %. These indica e he e o Ghana is
making in he ene gy ansi ion dynamics accep ed globally. Howe e ,
he o he sha e o low ca bon has a mean o 6.497 % wi h a minimum
alue o 3.71 % and a maximum alue o 8.32 %. This is because hy-
d oelec ici y domina es he ene gy sec o o Ghana.
We p esen he s a iona y es s o he independen a iables. We used
he Dickey–Fulle and he Phillips–Pe on es s. The null hypo hesis o
bo h es s posi s he p esence o a uni oo in he a iable. Phillips-
Pe on inco po a es Newey-Wes s anda d e o s o add ess se ial co -
ela ion, while he Augmen ed Dickey-Fulle es inco po a es ex a lags
o he i s -di e enced a iable. Shown in Appendix B, all he a iables
a e s a iona y a le els excep exchange a e which is s a iona y a he
i s di e ence.
4. Resul s and discussions
4.1. Impac o enewable ene gy ansi ion on me chandised ade
balance
This sec ion p esen s he esul s o he dynamic simula ed model o
ene gy ansi ion and me chandised ade balance. Table 2 p esen s he
e ec o ene gy ansi ion on he me chandised ade balance. We
obse e ha he lag o he balance o ade inc eases he ade balance in
he cu en pe iod. The esul s u he show ha he coe icien o sha e
o enewable ene gy in elec ici y is nega i e e en hough i is no sig-
ni ican . Addi ionally, we obse e ha he sha e o low-ca bon ene gy
has insigni ican nega i e e ec s on he me chandised balance o ade.
Plausibly, indus ies ha ely less on ca bon-in ensi e ac i i ies domi-
na e Ghana’s economy. The ansi ion o low-ca bon p ac ices migh no
ha e a big in luence on ade dynamics i he main GDP-gene a ing in-
dus ies a e no highly dependen on high-ca bon p oduc ion p ocesses.
The kinds o p oduc s and se ices Ghana buys and expo s a e e y
impo an . The impac on he ade balance can be negligible i he
aded goods a e no s ongly linked o high ca bon emissions o i he e
is a small ma ke demand o low-ca bon p oduc s. T ade balances may
be impac ed by he s a e o he wo ld economy and consume demand
o low-ca bon goods. Addi ionally, Ghana is s ill in he ea ly phases o
implemen ing low-ca bon policies; as he economy changes, he impli-
ca ions on he ade balance could no become appa en igh away.
These empi ical esul s con i m B adshaw e al. (2022) who indica e
ha u u e oil demand dynamics exhibi conside able unce ain y, p e-
sen ing a compa a i e e alua ion o he wo ld’s majo oil expo e s.
Con e sely, Wazi i, e al. (2018) e eal ha consump ion o enewables
in ad anced coun ies o ne ene gy-impo ing coun ies a ec ed
Nige ia’s pe oleum expo s nega i ely in so doing ins iga ing a sub-
s an ial educ ion in he e enue sums being made he e om. Also,
Khan and Shaheen (2020) ound he elas ici y be ween c ude oil impo
demands and consump ion o enewables e en hough he e was a small
size magni ude.
O he a iables such as ene gy und and exchange a e inc ease
me chandised ade balance. While he lag o subsidies dec eases he
me chandised balance o ade. An inc ease in he exchange a e migh
esul in lowe impo s o domes ic consume s and highe expo p ices
o o e seas cus ome s. In he case o Ghana, expo s could become mo e
cos ly o o e seas consume s i he alue o he Ghanaian Cedi in-
c eases, which could esul in a decline in expo olumes. Simul a-
neously, impo s can become mo e a o dable o domes ic cus ome s,
which migh encou age mo e impo s. Exchange a e luc ua ions can
ha e an e ec on expo ea nings o na ions like Ghana ha depend on
he expo o commodi ies o aw esou ces. An inc ease in he alue o
he na ional cu ency may esul in a d op in expo e enue i he na-
ion’s expo s a e alued in o eign cu encies, such as US dolla s.
Fu he , indus ies may see lowe ene gy p ices i he ene gy und is
u ilized o und he c ea ion o mo e economical and e icien ene gy
sou ces. Reduced ene gy p ices ha e he po en ial o imp o e Ghanaian
expo s and he coun y’s goods ade balance by making he coun y’s
p oduc s mo e compe i i e on he in e na ional ma ke .
Figs. 2a and 2b show ha ene gy ansi ion using bo h low ca bon
ene gy and enewable ene gy in elec ici y gene a ion by 1 % and 5 %
signi ican ly inc eases he balance o ade o he 4 h yea a e which
ene gy ansi ion dec eases he balance o ade o he 9 h yea . A e he
9 h yea , ene gy ansi ion by bo h pe cen ages inc eases he ade
balance o Ghana. We obse e ha he ene gy ansi ion by 5 % has a
highe impac han he ene gy ansi ion by 1 %. Addi ionally, i is
obse ed ha using he sha e o enewable ene gy in elec ici y gene -
a ion has a dec easing a e ela i e o he i s ou yea s. This implies
ha low ca bon ene gy will ha e g ea e impac s on he ade balance
a e he 9 h yea . These co obo a e he s udy by Xie e al. (2021) who
ind ha he ela ionship be ween ene gy consump ion ansi ion and
p oduc i i y is in e se N and non-linea . Tha is, oo high o oo low a
deg ee o ene gy ansi ion does no enhance p oduc i i y.
Plausibly, he e will p obably be la ge in es men s made in enew-
able ene gy in as uc u e du ing he ini ial yea s o he shi o low-
ca bon ene gy. A empo a y nega i e impac on he ade balance
could esul om an inc ease in he impo a ion o echnology, ma-
chine y and expe ience. Be ween he 5 h and he 9 h yea , as Ghana
becomes mo e sel -su icien in enewable ene gy, he need o impo
adi ional ossil uels may dec ease. This educ ion in ossil uel impo s
could lead o an imp o emen in he balance o ade du ing his pe iod.
Also, Ghana may be able o expo i s knowledge and echnology in
enewable ene gy o o he na ions in he egion i i can build a s ong
low-ca bon ene gy sec o . This migh ha e a a ou able e ec on he
ade balance. A e nine yea s, g ea e indus ializa ion and economic
expansion could esul om Ghana’s abili y o build a obus low-ca bon
ene gy sec o . A ise in impo s could a ec he ade balance as a esul
o a highe demand o p oduc s and se ices.
Table 2
Ene gy ansi ion and me chandised ade balance.
Coe Coe
Lagbalance 0.409***
(0.093)
0.445***
(0.088)
Sha e o enewable in elec ici y −1.711
(1.054)
Sha e o low ca bon ene gy 16.304
(14.381)
Exchange a e 43.523***
(11.992)
38.678***
(11.957)
Log o ene gy und 0.330
(33.259)
−6.568
(33.444)
Log o subsidies 90.209**
(43.636)
87.447**
(43.037)
Nominal g ow h −4.458
(3.233)
−4.893
(3.229)
Lagexch 9.449
(24.785)
8.645
(24.598)
Lagene gy und −9.200
(22.278)
−4.966
(22.403)
Lagsubsidy −61.140*
(34.404)
−68.997**
(34.379)
Lageconom 0.839
(3.645)
0.934
(3.618)
_cons −1757.253**
(865.513)
−1370.846
(857.142)
C. O eng e al. Resea ch in Globaliza ion 9 (2024) 100244
6
4.2. Impac o ene gy ansi ion on me chandised expo s
In his sec ion, we discuss he ou come o he dynamic simula ed
model o ene gy ansi ion and me chandised expo s. Table 3 p esen s
he poin es ima e o he e ec o ene gy ansi ion on me chandised
expo s. We obse e ha he lag o me chandised expo s, exchange
a es and subsidies ha e posi i e e ec s on cu en me chandised ex-
po s while he lag o ene gy unds and lagged exchange a e ha e
nega i e e ec s on me chandised expo s. The sha e o enewable in
elec ici y gene a ed has a posi i e bu no signi ican e ec on
me chandised expo s. Addi ionally, we obse ed ha he sha e o low-
ca bon ene gy inc eases me chandised expo s. Thus, a 1 % inc ease in
ene gy ansi ion by sha e o low-ca bon ene gy inc eases me chandised
expo s by 0.461 % and i is signi ican a a 1 % le el. The implica ion is
ha o inc ease me chandised expo s, Ghana mus inc ease i s sha e o
low-ca bon ene gy adop ion and use. These indings con i m he s udy
by Bilgili (2015) and Hoang e al. (2020) who ind a posi i e
co-mo emen be ween indus ial p oduc ion and consump ion o
enewable ene gy in he long un. Howe e , he indings a e con a y o
hose o S ockl and Ze ahn (2020) who ind a signi ican deg ee o
unce ain y when i comes o p edic ing u u e oil demand.
Ghana mus in es in low-ca bon ene gy. By in es ing in low-ca bon
ene gy, Ghana can di e si y i s ene gy mix by educing i s dependence
on adi ional ossil uels. This di e si ica ion makes he coun y less
ulne able o luc ua ions in global oil p ices, p o iding s abili y o
bo h domes ic and expo -o ien ed indus ies. Also, in ecen imes,
enewable ene gy echnologies like wind and sola elec ici y ha e
become mo e and mo e a o dable globally. Businesses in Ghana may
expe ience educed p oduc ion cos s as a esul o eme ging echnolo-
gies which con ibu e o dec eases in p ice. Ghanaian p oduc s and
se ices a e mo e compe i i e on he global ma ke due o lowe
manu ac u ing cos s, which could lead o an inc ease in expo olumes.
Fu he mo e, en i onmen al esponsibili y and sus ainabili y a e
becoming inc easingly impo an in many de eloped na ions and global
ma ke places. Consume s and companies in hese ma ke s migh ind
low-ca bon goods and se ices mo e en icing, which would aise de-
mand o Ghana’s expo s.
Fo elec ici y expo s, he lag o elec ici y expo s inc eases elec-
ici y expo s o o he coun ies such as Togo and o he neighbou ing
coun ies. I is obse ed ha ene gy ansi ion using he sha e o
enewable gene a ed h ough elec ici y su p isingly educes he expo
o elec ici y. I is obse ed ha a 1 % inc ease in he sha e o enewable
Fig. 2a. Low sha e o ca bon ene gy on me chandised ade balance.
Fig. 2b. Sha e o enewables in elec ici y on me chandised ade balance.
C. O eng e al. Resea ch in Globaliza ion 9 (2024) 100244
7
ene gy in elec ici y gene a ion educes elec ici y expo s by
11.647GWh. The sha e o enewable elec ici y in he ene gy mix can be
in luenced by he le el o in as uc u e de elopmen . I is gene ally
known ha he e a e challenges in implemen ing o main aining
enewable ene gy in as uc u e in Ghana. This could impac he o e all
con ibu ion o enewables o he elec ici y g id. Fu he , he le el o
in es men in enewable ene gy p ojec s in Ghana can signi ican ly in-
luence hei con ibu ion o he elec ici y g id. Adequa e unding and
suppo o enewable p ojec s a e essen ial o hei success ul imple-
men a ion and in eg a ion in o he ene gy sys em. We also obse e ha
he sha e o low-ca bon ene gy inc eases he expo o elec ici y. Thus,
a 1 % inc ease in he sha e o low-ca bon ene gy inc eases elec ici y
expo s by 70.79GWh. This means ha Ghana can inc ease elec ici y
expo s by in es ing in low-ca bon ene gy sou ces. Low-ca bon and
sus ainable ene gy sou ces a e becoming mo e and mo e impo an in
many na ions and a eas as a esul o en i onmen al conce ns and
pledges o lowe GHG emissions. Since low-ca bon elec ici y, such as
ha p oduced by enewable ene gy sou ces, is in line wi h hese global
ends, i is mo e appealing o na ions looking o impo g eene ene gy.
Also, coun ies o en se enewable ene gy a ge s as pa o hei clima e
change mi iga ion s a egies, as Ghana has been doing. Achie ing and
su passing hese a ge s, can enhance a na ion’s epu a ion and s anding
in in e na ional o ums, po en ially opening up oppo uni ies o elec-
ici y expo s.
Figs. 3a and 3b show ha ene gy ansi ion inc eases me chandised
expo s up o he 6 h yea and a e me chandised expo s luc ua e by
ene gy ansi ion. We also obse e ha he ene gy ansi ion by 5 % o
bo h sha es o ansi ion has g ea e impac s han he 1 % ansi ion
scena ios.
Figs. 3c and 3d desc ibe he simula ed e ec s o ene gy ansi ion on
he expo o elec ici y. I is obse ed om Fig. 3c ha bo h scena ios o
low ca bon sha e inc ease he expo o elec ici y o he 4 h yea a e
which i s a s dec easing o he 9 h yea . I s a s inc easing elec ici y
expo s om he 10 h yea . Howe e , he anges o he 5 % a e sho e
han he 1 % ansi ion scena io. Plausibly, he e may ha e been la ge
ini ial in es men s made in enewable ene gy in as uc u e, such as
wind and sola a ms. These expendi u es may esul in highe ou pu ,
which could c ea e an excess o elec ici y ha can be expo ed. Also, in
he ini ial pe iod, he e migh be an economic upswing ha inc eases he
demand o elec ici y, bo h domes ically and o expo . Howe e , as
economic condi ions s abilize o o he coun ies de elop hei enew-
able capaci ies, he demand o elec ici y expo s om Ghana may
dec ease.
We obse e om Fig. 3d ha a 5 % scena io o he sha e o enewable
in elec ici y gene a ion inc eases he expo o elec ici y o he 4 h yea
a e which a 5 % ene gy ansi ion scena io luc ua es wi h dec eases
and inc eases. Howe e , he 1 % scena io dec eases he expo s o
elec ici y o he 2nd yea a e which i inc eases elec ici y expo s o
he 4 h yea . A e he 4 h yea , a 1 % ene gy ansi ion scena io has
uns able e ec s on elec ici y expo s. This indica es ha in es men s in
enewable ene gy in as uc u e con ibu e posi i ely o Ghana’s elec-
ici y p oduc ion capaci y. Howe e , he luc ua ions in he subsequen
yea s sugges ha economic condi ions, bo h domes ically and in e -
na ionally, migh be in luencing he demand o elec ici y expo s. The
ini ial dec ease in elec ici y expo s in he 2nd yea unde he 1 %
scena io may be due o slowe de elopmen in enewable ene gy p o-
jec s. The subsequen inc ease in expo s un il he 4 h yea could be
a ibu ed o he g adual adop ion and g ow h o low-ca bon echnolo-
gies. Howe e , he ins abili y pos -4 h yea indica es ha he 1 %
ansi ion scena io may no p o ide a sus ainable o eliable long- e m
solu ion.
4.3. Impac o enewable ene gy ansi ion on me chandised impo s
In line wi h he objec i es o he pape , his sec ion discusses he
Table 3
Impac o ene gy ansi ion on me chandised expo s.
Me chandised expo s Elec ici y expo
Coe Coe Coe Coe
Lagexpo 0.472***
(0.094)
0.461***
(0.091)
Lelec i 0.446***
(0.093)
0.398***
(0.105)
Sha e o enewable
in elec ici y
1.480
(1.046)
−11.647***
(2.523)
Sha e o low
ca bon ene gy
0.461***
(0.091)
70.790**
(36.983)
Exchange a e 82.513***
(9.586)
82.403***
(9.180)
10.158
(23.084)
25.263
(24.935)
Log o ene gy und 24.905
(33.094)
19.024
(31.570)
36.532
(81.184)
90.666
(87.685)
Log o subsidies 108.4042**
(42.090)
115.658***
(40.751)
8.084
(103.261)
−10.997
(112.853)
Nominal g ow h 0.571
(0.925)
0.105
(0.905)
3.270
(2.229)
−0.897
(2.345)
Lagexch −70.641***
(23.161)
−65.398***
(22.540)
−16.1045
(56.467)
−0.036
(61.915)
Lagene gy und −15.120
(22.195)
−10.913
(21.070)
−36.516
(54.130)
−76.226
(58.268)
Lagsubsidy −62.2966*
(34.163)
−56.435*
(33.107)
4.492
(81.885)
62.815
(89.063)
Lageconom 4.2666
(3.551)
4.384
(3.440)
7.787
(8.562)
6.013
(9.376)
_cons −1510.190*
(825.571)
−1692.350**
(800.853)
495.092
(1993.717)
−1268.32
(2162.579)
Fig. 3a. Low sha e o ca bon ene gy on me chandised expo s.
C. O eng e al. Resea ch in Globaliza ion 9 (2024) 100244
8
