Petroleum rent, income, and energy trilemma: evidence from selected oil producers in africa

Abstract

The trilemma of providing secure, affordable, and sustainable energy has become a much talked about issue in recent times due to concerns about climate change. Regarding the energy trilemma dimensions, focusing on one at the expense of the other two is likely to be just as harmful to improving human quality of life as ignoring environmental sustainability. This study employs a panel-ARDL approach and panel-GMM to analyze the effect of petroleum rent on energy trilemma in selected oil-producing countries in Africa. The study reveals petroleum rent and per capita income between, respectively, enhances countries’ performance on the energy trilemma index in the long run, whereas, in the short run, income per capita decreases the energy trilemma. Petroleum rent and income per capita support countries in making energy systems environmentally sustainable and, at the same time, contribute to countries' improvements in energy equity. Petroleum rent of oil-producing African economies begins to be beneficial to energy poverty reduction and access to electricity when petroleum rent reaches 36.7% and 40.57% of GDP, respectively. Governments of oil-producing African countries should put measures towards increasing petroleum rent to improve the energy trilemma index, ensure energy poverty reduction, and reduce energy supply insecurity.