TRADE OPENNESS, ENERGY DEMAND, AND SUSTAINABLE DEVELOPMENT IN SOUTH AFRICA: EMPIRICAL EVIDENCE FROM SOUTH AFRICA USING ARDL AND NARDL MODELS

This study investigates the dynamic relationships between CO₂ emissions, economic growth, energy consumption, trade openness, and renewable energy adoption in South Africa over the period 1990–2023. Employing Autoregressive Distributed Lag (ARDL) and Nonlinear ARDL (NARDL) techniques, the analysis confirms a long-run cointegration relationship among these variables and validates the Environmental Kuznets Curve (EKC) hypothesis. The findings reveal that economic growth initially exacerbates CO₂ emissions, but beyond a certain threshold, further growth contributes to environmental improvements. Energy consumption positively influences emissions, with asymmetric effects indicating a stronger impact of increases relative to decreases in energy use. Conversely, renewable energy consumption significantly reduces emissions in both the short and long term. Trade openness is found to contribute to emission growth, underscoring the need for environmentally conscious trade policies. Robustness checks confirm the stability and validity of the models. The results highlight the critical importance of integrated policies that promote clean energy transition, sustainable trade, and green growth to achieve South Africa’s climate and development objectives.