The Impact of Urbanization on Energy Consumption In South Africa: An Empirical Investigation

The purpose of this paper is to examine the impact of urbanization on energy consumption in the case of South Africa. To empirically estimate this, the study employed the autoregressive distributed lag (ARDL) approach and annual time series data covering the period from 1983 to 2021. In this study, urbanization and energy consumption are measured through the total urban population as a share of the total population and total energy consumption per capita, respectively. The findings from the ARDL cointegration test confirm that an increase in urbanization leads to a short-run increase and a long-run decrease in energy consumption. The results further confirm that an increase in economic growth leads to a long-run and short-run increase in energy consumption. It was also found that financial development leads to a long-run increase in energy consumption, while its first lagged values lead to a short-run decline. Foreign direct investment was found to have no significant impact on energy consumption both in the long run and short run.