Nexus between green finance, renewable energy and carbon emission: Empirical evidence from selected Asian economies

Abstract

Using data from selected Asian countries from 1995 to 2018, this new article investigated the dynamic correlation among non-fossil fuel and fossil - based energy utilization, economic growth, and Gross domestic product (GDP). For empirical research, the panel co-integration approach with structural breakdowns is employed. The findings indicate that non-fossil fuel and fossil - based energy, economic growth, and economic expansion have a long-term equilibrium connection. In both the short and long term, the panel causality studies reveal bidirectional causation between industrial production and both non-renewable energy and renewable energy consumption. The results from the panel error correction model reveals that the positive (negative) elasticities of nonrenewable energy consumption are 0.96 (1.15), suggesting that a 1% rise (decrease) in nonrenewable energy is expected to increase (reduce) 0.96% (1.15%) in carban dioxide emissions. These findings suggest that selected Asian countries’ industrial production and overall economic growth are still energy-dependent. In addition, there is two directional short run test causality among renewable energy consumption and non-renewable energy consumption might help to create a more sustainable energy economy.