South Africa’s clean energy transition faces nonlinear roadblocks

South Africa’s shift toward renewable energy is accelerating, but new research shows that its environmental and economic impacts are far from linear. A detailed analysis highlights that specific thresholds in renewable energy generation and trade openness must be met to achieve substantial reductions in carbon emissions without disrupting economic growth.

A recent study, “Threshold Effects on South Africa’s Renewable Energy–Economic Growth–Carbon Dioxide Emissions Nexus: A Nonlinear Analysis Using Threshold-Switching Dynamic Models,” published in Energies, provides fresh insights into these dynamics. The paper investigates four decades of data, from 1980 to 2023, to assess how renewable energy, economic growth, carbon emissions, coal consumption, and trade openness interact in a complex, non-linear system.

Nonlinear dynamics in renewable energy and carbon emissions

The study makes clear that the relationship between renewable energy generation and carbon dioxide emissions is highly threshold-dependent. Using threshold-switching dynamic models and nonlinear autoregressive distributed lag (NARDL) methods, the authors identify a renewable energy share threshold of approximately 56.4 percent. Below this level, increases in renewable capacity have limited impact on reducing emissions. However, surpassing this threshold significantly accelerates decarbonization, indicating that renewable energy must achieve critical mass before yielding meaningful environmental benefits.

The research also confirms asymmetries in how renewable energy influences emissions. While renewable energy expansion reduces emissions in the long term, the short-term effects are muted if overall reliance on coal remains high. This finding reinforces the need for integrated planning to gradually phase down coal while ramping up renewables to achieve a balanced and stable transition.

Economic growth, another key factor, also contributes to rising emissions but demonstrates nonlinear patterns. The study shows that growth-driven energy demand tends to raise carbon output unless offset by significant investments in renewable capacity and improvements in efficiency.

Trade openness and the coal-energy nexus

The paper also reveals the complex role of trade openness in shaping South Africa’s energy and emissions profile. The researchers identify two critical thresholds in trade dynamics: a 397.9 percent trade-openness threshold influencing economic growth and a 385.3 percent threshold linked to coal consumption transitions.

When trade openness remains below these thresholds, its effect on emissions and growth is limited. However, once trade integration exceeds these levels, it creates conditions for more efficient energy use, encouraging a gradual reduction in coal dependence and facilitating a stronger pivot toward cleaner energy sources. This reflects the growing importance of trade and global integration in providing access to advanced technologies, financing, and partnerships that drive renewable energy development.

The study also finds evidence of bidirectional causality between coal consumption and trade openness, meaning that changes in one variable directly influence the other. This dynamic suggests that South Africa’s export-oriented industries and domestic coal reliance are deeply intertwined, underscoring the need for careful policy coordination to decouple growth from high-carbon pathways.

Policy imperatives for a just and effective transition

The study found no direct causal link between renewable energy expansion and economic growth during the period studied. Contrary to the assumption that renewable energy automatically boosts economic performance, the evidence indicates that while renewables help reduce emissions, their growth alone does not significantly drive GDP unless paired with structural reforms and strategic investments in supporting industries.

For policymakers, this underscores the importance of adopting a multi-pronged strategy. The authors recommend focusing on achieving the renewable energy share threshold while simultaneously enhancing trade integration, modernizing grid infrastructure, and ensuring that industrial sectors are prepared to adopt and benefit from renewable technologies.

The paper also highlights the importance of maintaining policy consistency to attract long-term investment into the renewable sector. Programs such as the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) have already demonstrated their effectiveness, catalyzing more than USD 20 billion in investments and adding over 6,200 megawatts of renewable capacity to the grid. Continued support and expansion of such programs will be essential to sustain momentum and bridge the gap between current capacity and the critical thresholds identified in the study.

Additionally, the authors stress the importance of addressing the social and economic dimensions of the energy transition. South Africa remains heavily dependent on coal, both for electricity generation and employment in mining communities. A just transition that balances environmental goals with job security and economic stability is vital to building broad-based support for the country’s decarbonization agenda.