Clean Energy Utilization and Sustainable Industrial Development in ECOWAS: Evidence from Panel Cointegration

Abstract

This paper aims to examine the impact of the use of clean energy on industrial development in the Economic Community of West African States. This was done with the aim of bridging the gap in the supply of energy in the West African region and accelerating the rate of industrialization in the region. Data employed in this study were sourced from World Bank’s World Development Indicators (WDI) from 1990 to 2023. Using the Fully Modified Ordinary Least Squares method, in addition to the Dynamic Ordinary Least Squares method for robustness checks, this paper found out that clean energy positively and significantly influences industrial output. On the other hand, renewable energy was found to have no influence on industrial output. Foreign direct investment was found to have a negative and significant influence on industrial output. The results of the Granger causality test showed that there was a unidirectional causality from clean energy to industrial output. This paper concluded that the improvement of access to clean and modern energy in West Africa is essential in accelerating the rate of industrialization in the region.