ABSTRACT This study evaluates the dynamic relationship between Green Finance (proxied by green Official Development Assistance) and the expansion of Renewable Energies on biodiversity conservation across 48 African countries over the period 2000–2017. The analysis is conducted using a two‐step System GMM model, allowing management of endogeneity and strong ecological inertia. The results confirm a highly conditional effectiveness of policies. Green Finance exerts a positive effect in middle‐income countries, but becomes ineffective, or even negative, in low‐income countries after 2013, signalling institutional failures and allocation problems. The expansion of Renewable Energies poses a persistent negative trade‐off for biodiversity. Nevertheless, conditional analysis reveals that Human Development significantly mitigates this cost. The estimation of the critical HDI threshold required to neutralize the negative impact of Renewable Energies is largely superior to the realistic HDI bounds. This result establishes that Africa is caught in a trade‐off trap: Institutional improvement alone is not enough to achieve ecological decoupling. Conversely, middle‐income countries have succeeded in surpassing this threshold, showing the example of effective decoupling. These discoveries underline the urgency of implementing targeted green financing frameworks conditional on the quality of local governance. The challenge of the African transition no longer resides in the volume of investments, but in the institutional capacity to integrate ecological and social objectives.
Hadiza et al. (Fri,) studied this question.