Empowering Asia's sustainable future: Unraveling renewable energy dynamics with trade, carbon emission, governance, and innovative interactions

Abstract

This study is important as it addresses critical challenges in Asia's sustainable development by examining the intricate relationships between renewable energy dynamics, trade, carbon emissions, governance, and their interactive effects from 1990 to 2020. This study introduces a novel interactive term (CO2*QGov) to assess the effectiveness of government policies in reducing carbon emissions and promoting renewable energy. This research employs many econometric approaches, such as cross-sectional ARDL, Westerlund co-integration techniques, and FMOLS and DOLS, to ensure the robustness of the findings. The results of the present study confirm that trade openness and FDI positively influence renewable energy consumption. Conversely, corruption, urbanization, and the interactive term (CO2*QGov) were associated with reduced renewable energy consumption, indicating the need for comprehensive policy interventions. Governments should consider offering financial support to households, industries, and businesses to stimulate renewable energy production and consumption, such as subsidies for renewable energy installations like solar panels.