Renewable energy and its impact on agricultural and economic development in the Netherlands and South Africa

doi:10.1016/j.regsus.2025.100209

Abstract

Abstract:

The use of renewable energy is an important way to achieve sustainable agricultural and economic development. However, there are differences in access to renewable energy between the Global North and Global South. This study utilised an autoregressive distributed lag-error correction model and the data spanning from 1991 to 2021 to comparatively analyse the dynamic relationship among renewable energy consumption, the value of agricultural production, gross domestic product (GDP), economic diversification index, urban population, the total water extraction for agricultural withdrawal, and trade balance in the Netherlands and South Africa. In the short run, renewable energy consumption was increased by the value of agricultural production but decreased by GDP in South Africa. In the long run, renewable energy consumption and GDP increased the value of agricultural production, while the value of agricultural production also increased GDP in South Africa. However, in the Netherlands, there was no short- and long-run relationship between renewable energy consumption and agricultural and economic development. The results revealed that there was a short- and long-run relationship in South Africa. Moreover, in the Netherlands, the adjustment speed was -1.46 for renewable energy consumption with an error correction of 0.68 a (8.22 months). In South Africa, the adjustment speed was -1.28 for renewable energy consumption with an error correction of 0.78 a (9.38 months). Therefore, compared to South Africa, renewable energy consumption in the Netherlands takes less time to return to balance after a shock. These findings signify different trajectories on sectoral and economic transition initiatives spurred using renewable energy between the Netherlands and South Africa. Policy relating to initiatives such as “agro-energy communities” in Global South countries such as South Africa should be emphasised to promote the use of renewable energy in the agricultural sector.

Key words: Autoregressive distributed lag-error correction model (ARDL-ECM), Renewable energy consumption, Agricultural production, Economic development, The Netherlands, South Africa

Saul NGARAVA, Alois Aldridge MUGADZA. Renewable energy and its impact on agricultural and economic development in the Netherlands and South Africa[J]. Regional Sustainability, 2025, 6(2): 100209.

Figures/Tables 8

Table 1

Fig. 1.

Table 2

Table 3

Table 4

Table 5

Table 6

ARDL model of short-run relationship among variables in the Netherlands and South Africa."

	The Netherlands							South Africa
	lnRE	lnAP	lnGDP	lnEDI	lnWE	lnURB	lnTB	lnRE	lnAP	lnGDP	lnEDI	lnWE	lnURB	lnTB
lnAP	2.89	-	0.87^***	−1.12	−0.16	−0.02^***	3.16^***	8.61^**	-	0.85^***	−1.07^***	−0.02	−0.02	−0.11
lnAP₋₁	0.84	0.25	0.38	−0.25	3.11^*	-	-	−8.10^**	0.38^*	−0.02	0.02	−0.01	-	-
lnAP₋₂	-4.44	0.25	-0.41	0.05	-	-	-	6.92^**	-0.53^***	0.21	-0.41	-	-	-
lnEDI	-12.85	-0.10	0.89	-	5.24	0.02	1.37	0.15^*	-0.64^***	0.67^***	-	-0.09	-0.01	-0.15^*
lnEDI_-1	8.58	0.37	-	0.33	-	-	-	-10.67^**	0.33	-0.01	-0.31	0.19	-0.02	-0.13
lnEDI_-2	-	-	-	-0.08	-	-	-	-12.37^**	0.93^***	-0.98^***	0.79^*	0.33	-	-0.05
lnGDP	-6.21	0.83^***	-	0.15	-0.30	0.01	-0.41	-9.98^**	0.99^***	-	0.99^***	0.12	0.01	0.05
lnGDP_-1	-	-0.66^**	0.47	-0.08	-	-0.00	-	6.83^**	-0.33	0.38^**	-0.12	-0.10	0.01	-
lnGDP_-2	-	0.10	0.22	-	-	0.00	-	0.53	-	-	-	-0.15	-	-
lnRE	-	0.00	0.01	-0.00	0.06	0.00	-0.13^***	-	0.05^**	-0.01	0.02	0.02	-0.00	-0.00
lnRE_-1	-0.46^*	0.01	-	0.00	-	-	-	-0.59^**	0.05^***	-	0.03	-	0.00	-0.00
lnRE_-2	-	-	-	-	-	-	-	0.31	-	-	0.01	-	-	0.01
lnTB	-1.30	0.07^**	-0.06^*	0.02	0.10	0.00	-	-15.66	0.37	0.85	-1.03	-0.63	-0.03	0.08
lnTB_-1	-	-0.02	-0.03	0.03	-	-	-0.01	0.26	-0.47	-	-1.16	0.43	-0.01	-0.03
lnTB_-2	-	-0.00	-0.03	0.04^**	-	-	0.41^**	-9.14^***	0.43^*	-	-	0.17	0.00	-
lnURB	311.85	-21.79^*	-8.86	13.23^*	-	-	5.76^**	-222.03^*	15.44^**	-21.58^**	15.71	12.60^**	-	-0.43
lnURB_-1	-718.11	20.91^*	37.10	-25.52	-	1.28^***	-	25.70	-2.83	12.55	-4.74	-5.49	1.14^***	1.45
lnURB_-2	415.80	-	-26.84	11.65	-	-0.29	-	175.57	12.43^**	9.18	-12.01	-6.02^*	-0.30	-1.24
lnWE	-0.57	-0.00	-0.02	0.01	-	-0.00	0.01	2.71	0.15	0.30	0.12	-	0.03	-0.15
lnWE_-1	1.18^**	0.00	-0.04	0.02	-	-	-	13.93^*	-0.67	-0.23	-0.26	0.36	-	0.24
lnWE_-2	0.68	-0.04	-0.00	0.00	-0.01	-	-	-19.82^**	1.51^***	-1.22^**	1.51^*	0.50	-	-0.00
Constant	77.22	17.20	-36.21	17.64	-80.85^*	0.42	-140.06	496.47^**	-9.17	-2.10	26.11^*	-15.24	1.03	9.62
Probability	0.02	0.00	0.00	0.00	0.43	0.00	0.00	0.07	0.00	0.00	0.00	0.00	0.00	0.06
R²	0.79	0.97	0.99	0.96	0.28	0.99	0.86	0.92	0.99	0.99	0.97	0.99	0.99	0.81
Adjusted R²	0.55	0.91	0.98	0.87	0.01	0.99	0.79	0.64	0.99	0.99	0.89	0.96	0.00	0.50
RMSE	1.15	0.05	0.04	0.02	0.68	0.00	0.34	0.41	0.03	0.05	0.06	0.03	0.00	0.02
F-statistic	5.71	1.43	1.05	2.15	2.38	1.52	4.46	15.40	7.23	4.24	2.10	3.82	0.84	1.63

Table 6

Table 7

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Variable	Abbreviation	Data source	Levene’s test for equality of variance		t-test for equality of mean
Variable	Abbreviation	Data source	F-statistic	Significance	t-statistic	Significance	Mean difference	Standard error difference
Renewable energy consumption (kW•h)	RE	FAOSTAT (2024)	52.41	0.00	-2.52	0.00	-3.12×10¹⁰	1.24×10¹⁰
Economic diversification index	EDI	Harvard Kennedy School (2024)	5.70	0.02	20.58	0.00	32.60	1.58
Gross domestic product (USD)	GDP	World Bank (2024)	31.14	0.00	-8.88	0.00	-4.02×10¹¹	0.45×10¹¹
Urban population (persons)	URB	World Bank (2024)	35.25	0.00	16.15	0.00	1.68×10⁷	0.10×10⁷
Trade balance (USD)	TB	WITS (2024)	42.00	0.00	-9.72	0.00	-4.22×10⁶	0.43×10⁶
Total water extraction for agricultural withdrawal (m³)	WE	FAOSTAT (2024)	36.30	0.00	36.02	0.00	9.16×10⁹	0.25×10⁹
Value of agricultural production (USD)	AP	FAOSTAT (2024)	0.35	0.56	-13.11	0.00	-6.50×10⁹	0.48×10⁹

	lnAP		lnEDI		lnGDP		lnRE		lnTB		lnURB		lnWE
	AIC	HQIC	AIC	HQIC	AIC	HQIC	AIC	HQIC	AIC	HQIC	AIC	HQIC	AIC	HQIC
Lag 0	-0.80	-0.79	-3.01	-3.00	0.54	0.55	3.85	3.86	2.32	2.34	-1.62	-1.61	2.11^*	2.12^*
Lag 1	-2.01^*	-1.98^*	-4.58^*	-4.55^*	-2.07^*	-2.04^*	3.76	3.79	1.41^*	1.44^*	-9.28	-9.25	2.15	2.17
Lag 2	-1.94	-1.90	-4.55	-4.51	-2.03	-1.99	3.70^*	3.74^*	1.48	1.52	-9.93	-9.89	2.22	1.27
Lag 3	-1.88	-1.82	-4.51	-4.45	-2.03	-1.97	3.78	3.84	1.50	1.52	-10.19^*	-10.14^*	2.30	2.36
Lag 4	-1.86	-1.79	-4.45	-4.38	-2.05	-1.98	3.78	3.85	1.57	1.64	10.14	-10.08	2.38	2.45

	lnAP		lnEDI		lnGDP		lnRE		lnTB		lnURB		lnWE
	AIC	HQIC	AIC	HQIC	AIC	HQIC	AIC	HQIC	AIC	HQIC	AIC	HQIC	AIC	HQIC
Lag 0	0.46	0.47	-0.54	-0.52	1.14	1.16	1.82^*	1.83	-3.91	-3.90	-0.88	-0.87	-0.97	-0.95
Lag 1	-1.30	-1.30	-1.42	-1.40	-1.06^*	-1.04^*	1.88	1.90	-4.45^*	-4.43^*	-8.66	-8.63	-3.50^*	-3.47^*
Lag 2	-1.26	-1.22	-1.64^*	-1.60^*	-1.06	-1.01	1.90	1.94	-4.38	-4.34	-8.77	-8.73	-3.43	-3.39
Lag 3	-1.24	-1.18	-1.57	-1.51	-1.04	0.98	1.85	1.90	-4.31	-4.35	-8.79	-8.74	-3.41	-3.36
Lag 4	-1.38^*	-1.32^*	-1.57	-1.50	-0.97	-0.90	1.92	1.99	-4.25	-4.18	-8.85^*	-8.78^*	-3.34	-3.27

Variable	The Netherlands							South Africa
Variable	lnRE	lnAP	lnGDP	lnEDI	lnWE	lnURB	lnTB	lnRE	lnAP	lnGDP	lnEDI	lnWE	lnURB	lnTB
lnRE	-	-	-	-	0.06	-	-0.10^**	-	0.09^**	-0.01	-	-0.12	-	-
lnEDI	-2.93	-	-	-	2.13	-	0.96	-14.14^*	0.53	-0.52	-	3.07	-	-
lnTB	-0.90	-	-	0.12	-0.06	-		-19.24	0.27	1.37	-	-0.25	-	-
lnGDP	-4.26	-	-	4.82	-0.19	-	-0.29	-2.05	0.57^***	-	-	-1.00	-	-
lnURB	6.55	-	-	-0.84^*	-	-	4.05^**	-16.29	0.15	0.25	-	7.97	-	-
lnAP	-0.49	-	-	-0.42	-	-	2.23^***	5.83		1.73^***	-	-0.27	-	-
lnWE	1.67^**	-	-	0.04	2.15	-	0.01	-2.49	0.86^***	-1.85^***	-		-	-
Adjustment speed	-1.46^***	-	-	-0.75^**	-0.92^***	-		-1.28^***	-1.15^***	-0.62^***	-	-0.14	-	-
R²	0.82	-	-	0.79	0.41	-	0.65	0.96	0.97	0.94	-	0.84	-	-
Adjusted R²	0.60	-	-	0.33	0.22	-	0.83	0.92	0.87	0.87	-	0.55	-	-
Root Mean Square Error	1.15	-	-	0.02	0.71	-	0.41	0.03	0.04	0.04	-	0.03	-	-
Durbin-Watson Serial Correlation test	2.39	2.23	2.56	2.01	2.35	2.19	2.45	2.45	2.03	1.95	1.72	2.58	2.14	2.59
Breusch-Godfrey Lagrange Multiplier test	13.01^***	4.58	6.85^**	0.05	16.54^***	3.17	4.98^*	16.95^***	17.47^***	12.70^**	8.42^**	11.28^***	5.33^*	13.01^***
White’s test for heteroscedasticity	27.00	27.00	27.00	27.00	27.00	27.00	27.00	27.00	27.00	27.00	0.41	27.00	27.00	27.00