Energy Mix and Greenhouse Gas Emission: Lessons from the Application of a Nardl Model in Côte D'ivoire

ABSTRACT: Depending on hydroelectricity, the evolution of Côte d'Ivoire's electrical mix is a major concern in the context of climate change. Indeed, over the period 2003-2020, a contrasting relationship emerges between the energy mix and air pollution in Côte d'Ivoire. Considering the mitigation objective of a 30.41% reduction in GHG emissions, which requires a total estimated cost of 22 billions US dollars, it is important to know whether the energy mix is a credible option for reducing greenhouse gas emission in Côte d'Ivoire. The nonlinear autoregressive time lag model (NARDL) was used to analyze the effect of the energy mix on air pollution in Côte d'Ivoire. With the cointegration hypothesis validated by Pesaran et al. (2001) bound test, the model was applied to data from several sources including the World Bank (WDI, 2022), the PRS group (2022) and the Federal Reserve Bank of Saint Louis (2022) covering the period 1990 to 2021. In addition, some robustness checks have been conducted with quantile and Fully Modified Ordinary Least Square (FMOLS) regressions. The main results of our estimates show that the energy mix has a nonlinear effect on greenhouse gas emission in the short and long term in Côte d'Ivoire. More specifically, a decrease in the energy mix has a stronger effect on increasing greenhouse gas emissions than an increase does on its reduction. In other words, the continued and increased use of renewable energy is an effective option for reducing the country's greenhouse gas emissions. This result is robust to the alternative estimation methods like quantile and Fully Modified Ordinary Least Square (FMOLS) even if the effects are lower than the NARDL ones. Consequently, actions aimed at promoting renewable energies should be encouraged by both public authorities and development partners. However, given the context of climate change with the frequent drying up of dams, the production of electricity from biomass and solar should be prioritized. Specifically, this involves : i) pursuing the production of solar energy by facilitating access to solar equipment through tax reduction ; ii) intensifying the production of electricity from biomass, in particular agricultural residues from the cocoa, oil palm and cotton crops, of which Côte d'Ivoire is a major producer.