Renewable energy and natural resource protection: Unveiling the nexus in developing economies

Abstract

Natural Resource Protection (NRP) has been on the agenda of the Sustainable Development Goals (SDGs) and is considered a pathway to sustainable development. The analysis of the determinants of NRP has received the attention of policymakers in framing evidence-based policies and strategies. Renewable energy (RE) is a major contributor to natural resource protection. However, existing studies have provided inconclusive evidence on the role of renewable energy in the NRP. This study primarily focuses on the assessment of how RE influences NRP in 22 developing economies. This study considers the nonlinear association between RE and NRP. Moreover, the role of governance effectiveness, financial technology, urbanization, and FDI in the NRP were also assessed. Furthermore, the analyses also explore the NRP-Kuznets curve by examining the role of economic growth in the NRP. The study, which detected cross-sectional dependence (CSD), heterogeneity, autocorrelation, and heteroskedasticity in the data, uses pooled regression with Driscoll-Kraay Standard Errors (DKSEs) and GLS for the econometric analysis. The results revealed a U-shaped relationship between renewable energy and NRP. Moreover, governance effectiveness, FINTECH, and FDI contribute to NRP, but urbanization has a negative impact on NRP. The analysis concludes an inverted U-shaped association between GDP per capita and NRP. A Bayesian regression analysis was also performed to validate the robustness of the results. Based on these findings, this study makes policy recommendations for improving NRP. Policymakers should prioritize renewable energy and sustainable resource exploitation through incentives and investments. Improving governance, adopting environmental rules, and involving stakeholders are critical. Financial technology can facilitate long-term investment in sustainability. Sustainable urban design should reduce the adverse effects of urbanization. FDI should be aligned with long-term development goals and appropriate resource management. Balancing economic growth with environmental protection requires multifaceted measures that promote green development and resource efficiency. Policy coherence and stakeholder participation are also critical.