The threshold effect of electricity consumption and urbanization on carbon dioxide emissions in Ghana

Purpose The quest for economic development has brought adverse effects on the environment through the release of greenhouse gases, such as carbon dioxide (CO 2) . This will counter the efforts to achieve the Sustainable Development Goals (SDGs) by 2030. This study, therefore, investigates the effect of electricity consumption and urbanization on CO 2 emissions in Ghana. Electricity consumption and urbanization are among the factors that can be used to reduce CO 2 emissions. Design/methodology/approach Following the STIRPAT framework with the Hansen (2000) least squares threshold estimation strategy, the study employed annual time series data from 1971 to 2019. Findings The study revealed a single threshold effect of both electricity consumption and urbanization on CO 2 emissions. Electricity consumption intensity reduces CO 2 emission when electricity consumption is below the threshold (6287GWh) but increases when consumption passes the threshold. However, urbanization exerts a positive influence on CO 2 emissions regardless the level of urbanization (either before or after the threshold point). Again, the empirical results revealed that the urbanization threshold moderates the effect of electricity consumption on CO 2 emissions. Research limitations/implications Policymakers have to consider redesigning the current urbanization mode to include some new-type urbanization elements. Originality/value The threshold effect of electricity consumption and urbanization on CO 2 emissions in Ghana is examined using the Hansen (2000) least square method.