Rethinking the coal phase-out in South Africa: Can renewable energy and eco-innovation promote a just transition and sustainable economic growth?

This study examines the pathways of a just transition in South Africa, utilising data from 1990 to 2021. Specifically, the study aims to assess the impact of coal usage, renewable energy consumption (REC), and eco-innovation (ECO) on CO 2 emissions and GDP growth. The study further investigates the moderating role of ECO in the relationship between REC and CO 2 emissions, as well as the relationship between REC and GDP. To achieve this, a STIRPAT model was employed to assess the environmental impact, while a Cobb-Douglas production function was utilised to analyse the economic growth dimension. Using the Dynamic Autoregressive Distributed Lag (DYNARDL) test, we found that increased coal usage is associated with a rise in CO 2 levels and GDP. The increase in GDP growth was also found to have a detrimental impact on the environment. Additionally, the potential of REC to reduce CO 2 emissions on its own is not statistically significant. Nevertheless, ECO was found to influence the relationship between REC and both CO 2 emissions and GDP, enhancing the negative effect of REC on CO 2 levels and amplifying its positive effect on GDP. Additionally, ECO reduces CO 2 emissions and promotes GDP growth on its own, although it may temporarily strain the economy. The robustness tests confirm the validity of these results. This study highlights the necessity of a cautious phase-out of coal in South Africa, as a rapid transition could jeopardise stability. The government should support the scaling up of renewables and invest in eco-innovation to balance environmental and economic goals.