Renewable energy and its impact on agricultural and economic development in the Netherlands and South Africa

The use of renewable energy is an important way to achieve sustainable agricultural and economic development. However, there are differences in access to renewable energy between the Global North and Global South. This study utilised an autoregressive distributed lag-error correction model and the data spanning from 1991 to 2021 to comparatively analyse the dynamic relationship among renewable energy consumption, the value of agricultural production, gross domestic product (GDP), economic diversification index, urban population, the total water extraction for agricultural withdrawal, and trade balance in the Netherlands and South Africa. In the short run, renewable energy consumption was increased by the value of agricultural production but decreased by GDP in South Africa. In the long run, renewable energy consumption and GDP increased the value of agricultural production, while the value of agricultural production also increased GDP in South Africa. However, in the Netherlands, there was no short- and long-run relationship between renewable energy consumption and agricultural and economic development. The results revealed that there was a short- and long-run relationship in South Africa. Moreover, in the Netherlands, the adjustment speed was –1.46 for renewable energy consumption with an error correction of 0.68 a (8.22 months). In South Africa, the adjustment speed was –1.28 for renewable energy consumption with an error correction of 0.78 a (9.38 months). Therefore, compared to South Africa, renewable energy consumption in the Netherlands takes less time to return to balance after a shock. These findings signify different trajectories on sectoral and economic transition initiatives spurred using renewable energy between the Netherlands and South Africa. Policy relating to initiatives such as “agro-energy communities” in Global South countries such as South Africa should be emphasised to promote the use of renewable energy in the agricultural sector.