Macroeconomic Determinants of Renewable Energy Consumption in Tanzania: A Time Series Analysis from 1990-2020.

Abstract

This study examines the macroeconomic determinants of renewable energy consumption in Tanzania using time-series data from 1990 to 2020. Stationarity tests such as the augmented Dickey-Fuller and Zivot Andrews are conducted, along with the autoregressive distributive lag bound test, to assess long-run relationships between the variables, which allows for the use of the error correction model. Moreover, the Granger causality test examines the causal links between the variables. In the long run, economic growth and trade openness impact renewable energy consumption positively. Carbon dioxide emissions impact negatively the dependent variable. Short-run analysis reveals a negative coefficient for economic growth and a positive coefficient for interest rates. Granger causality testing supports the feedback hypothesis between renewable energy consumption and economic growth. Policy implications include the need for sustained efforts to promote economic growth, increase trade and investments, and enhance accessibility and affordability of renewable energy technologies to foster sustainable energy consumption.