The Impact of Electricity Production on Environmental Quality: The Role of Institutional Quality in Ghana

The study investigated the impact of electricity production on environmental quality by specifically considering the role of institutional quality. The study used secondary data spanning from 1995 to 2021 and the autoregressive distributive lag model (ARDL) as a method of estimation. The findings revealed that electricity production, both in the short and long run, negatively affects environmental quality. Similarly, foreign direct investment and environmental quality were found negative both in the short and long run whereas economic growth and environmental quality had a positive relation in the short and long run. Furthermore, the findings showed that fossil fuel consumption in the long run has a negative impact on environmental quality. The study thus recommends that policymakers strengthen the various institutions to ensure that electricity production improves environmental quality. Thus, future studies should be geared toward the disaggregation of electricity production into different components and examine the effects of each component on environmental quality.