Environmental Leapfrogging in Kenya: The Role of Human Capital, Wealth and Institutions for the Adoption of Solar Energy

Abstract: While developing countries are faced with pressing socio-economic challenges, they are also increasingly vulnerable to the impacts of environmental degradation. Starting from this double challenge, current research has been focusing on the synergies between economic development and environmental protection. Within the field, the concept of environmental leapfrogging has emerged, referring to the possibility for developing countries to skip the dirty stages of development of the early industrializers by leapfrogging to the adoption of clean technologies. This thesis analyses the case study of the adoption of solar energy in Kenya, which, by contributing to doubling the electrification rate of the country, represents a successful case of environmental leapfrogging. Specifically, the thesis investigates the effect of human capital, wealth and the institutional environment on the adoption of solar energy in the past two decades in Kenya. Using the Kenya Integrated Household Budget Surveys of 2005/06 and 2015/16, the thesis finds a statistically significant association between the level of human capital and the adoption of solar energy, while it does not find it for wealth. Additionally, a qualitative analysis reveals the importance of the institutional environment as a driving factor for the adoption of solar energy. The results highlight the importance of investing in human capital development and creating an institutional environment conducive to sustainable development.