Recentering Global South in the Remittances-access to Clean Energy and Technologies Nexus: Net Effects and Thresholds Scenarios from Sub-Saharan Africa

Abstract

With a global surge in health, environmental and economic repercussions accompanying dirty fuels and technologies, coupled with limited studies on how external funds could influence the transition to clean energy. This study employs the system generalized method of moments (system GMM) to investigate the interactive effect of remittances and financial inclusion on access to clean energy and technologies, as well as the threshold effect of remittances on access to clean energy and technologies across 42 Sub-Saharan African (SSA) countries from 2000 to 2022. The empirical finding shows that an additional increase in migrant remittances yields a 27.2% increase in access to clean energy and technologies. Also, an increase in the level of financial inclusion also results in a 0.2% increase in access to clean energy and technologies. In the presence of financial inclusion, migrant remittance produces a 24.1% increase in access to clean energy and technology. At an 18.6% threshold, migrant remittance begins to positively influence access to clean energy and technology in SSA. The government should therefore implement policies that align with the threshold level to promote clean energy transition in SSA. This study extends existing studies on remittances and access to clean energy and technologies by delving into threshold outcomes.