Green Energy Demand and Financial Development

This study investigates the impact of financial development on green energy demand in Africa for the period 1990-2018. Using the dynamic generalized method of moments (GMM) technique, the findings of this study reveal that financial development reduces the share of renewable energy demand and increases environmental pollution in Africa. FDI inflows also hamper renewable energy demand and positively contribute to carbon dioxide emission. It is further evident from the results that although trade openness does not significantly enhance green energy demand, it matters for carbon dioxide emission. In line with these findings, appropriate policies are recommended.