Abstract
A balanced approach that combines trade policies, renewable energy promotion, and robust environmental regulations is crucial for improving ecological sustainability. Although the literature suggests that trade openness facilitates the transfer of cleaner energy technologies to developing nations, existing empirical studies have produced inconclusive results, particularly in Somalia's context. Therefore, this study explores the dynamic relationships between renewable energy, trade openness, economic growth, globalisation, and environmental degradation using annual time-series data from 1990 to 2019. Employing advanced econometric methods, including the autoregressive distributed lag (ARDL) model and dynamic OLS analyses, the findings reveal significant long-run cointegration among the variables. The essential insights of this study affirm that renewable energy strengthens environmental quality in both the short- and long-run, which stipulates its potential as a sustainable solution for Somalia. Conversely, trade openness has a detrimental impact on environmental quality in both the short- and long-run. While globalisation hinders environmental quality in the short-run, economic growth improves it. In addition, variance decomposition analysis highlighted that environmental deterioration was mainly self-perpetuating, accounting for 49% of the fluctuations. Additionally, variations in renewable energy sources are closely linked to environmental degradation, reinforcing the importance of adopting clean energy sources. Considering these findings, this study proposes establishing clear renewable energy strategies, leveraging globalisation for sustainable investments, and enforcing stringent environmental regulations that balance the benefits of trade openness. These observations provide a valuable framework for future research to examine sector-specific interventions and the long-term impacts of trade and energy policies on fragile economies.