The dynamic effects of green growth, environmental taxes, renewable energy consumption, financial development, and globalization on the load capacity factor in Vietnam: novel findings from wavelet quantile regression

To date, a sufficient number of studies have dealt with the effect of financial development on energy consumption. Yet, most of these studies have neglected diversification between renewable and non-renewable energy consumption. In fact, financial development may affect renewable energy consumption differently than non-renewable energy consumption. This is because renewable energy production necessitates high-cost investments. Therefore, the main objective of this study is to estimate the impact of financial development on renewable and non-renewable energy consumption in 37 OECD countries by employing the one-step system generalized method of moments (GMM) for the period 2002–2015. The findings statistically proved that financial development is positively linked with renewable energy consumption, but it is not related to non-renewable energy consumption. This paper also confirmed the existence of a negative correlation between the openness index and renewable energy consumption with non-renewable energy consumption. Intuitively, it was expected that renewable energy production engages in high-cost investments compared to non-renewable energy production. Thus, renewable energy consumption is more responsive to a solid and well-structured financial market than non-renewable energy consumption.

The effects of green innovation, environmental taxes, and financial development on renewable energy consumption in OECD countries

This study investigates the impacts of income, (renewable and non-renewable) energy consumption, trade, and financial development on carbon dioxide emissions in Turkey for the 1965-2015 period by employing thenon-linear autoregressive distributed lag method. Results show that non-renewable and renewable energy consumption, and trade openness have asymmetric impacts on pollution in long-run, while only renewable energy consumption has asymmetric impact on emissions in short-run. Results further reveal that the Environmental Kuznets Curve hypothesis is not valid in Turkey. Moreover, both financial development and trade positively affect emissions. Additionally, in long-run, positive shocks in renewable and non-renewable energy consumption increase emissions, but the impact of renewable energy consumption is infinitesimally small compared to the impact of non-renewable energy consumption. However, negative shocks in renewable energy consumption increase emissions, whereas negative developments in non-renewable energy consumption decrease emissions. Further, in short-run, positive developments in renewable energy consumptiondecrease emissions, and negative developments in non-renewable energy consumption have the same influence on emissions. In accordance with the findings, some policy suggestions are proposed.

Over time, the economy's growth, financial development, and environmental taxes have become vital tools in countering ecological degradation and promoting clean energy. However, there needs to be a research gap in assessing these policies' collective impact on renewable energy adoption, especially in developing West African countries. This study addresses this gap by evaluating the effectiveness of these policies from 1990 to 2020, using the Generalized Method of Moments (GMM), fixed effect, and pooled Ordinary Least Squares (OLS) models. The Dumitrescu-Hurlin panel causality test reveals bidirectional causality between economic growth and renewable energy consumption, as well as between financial development and renewable energy use. Unidirectional causality is found from environmental tax to renewable energy consumption. GMM results highlight the positive influences of economic growth and environmental taxes on renewable energy consumption, while financial development negatively affects it. These outcomes are consistent with fixed effect and pooled OLS models. Sectorial heterogeneity analysis indicates better results for countries with strong institutions, advanced technology, and strict regulations. In conclusion, this study's insights can guide policies for sustainability in West Africa, leveraging economic growth, environmental taxes, and technology for effective renewable energy integration.

PurposeThe primary objective of this research is to assess the influence of financial development, institutional quality and renewable energy consumption on India’s carbon emissions.Design/methodology/approachThis study utilises econometric methodologies, specifically the autoregressive distributed lag (ARDL) model and Toda–Yamamoto causality tests, to explore the interplay among renewable and non-renewable energy consumption, financial development, economic growth, institutional quality, trade openness and carbon emissions in India spanning the years 1996–2019.FindingsThe research indicates that in India, greater utilisation of renewable energy, enhanced financial development and improved institutional quality are linked to lower carbon emissions. On the contrary, an escalation in carbon emissions is related to the consumption of non-renewable energy and greater trade openness. The Toda–Yamamoto causality tests reveal one-way causal relationships from institutional quality, financial development, non-renewable energy consumption and economic growth to CO2 emissions. Furthermore, the study identifies reciprocal causation, demonstrating that carbon dioxide emissions influence renewable energy consumption and trade openness.Research limitations/implicationsThis study recommends that forthcoming research expand its focus by integrating more comprehensive indicators such as consumption, production, transport-based CO2 emissions or ecological footprint. Additionally, to bolster the rigour of future inquiries, researchers might consider exploring alternative regression analysis methods like NARDL and STAR.Originality/valueThis study addresses a significant gap in the existing literature by being the first empirical investigation into the effects of renewable energy consumption, institutional quality and financial development on carbon emissions in the Indian economy. Unlike prior research, we consider a comprehensive financial development and institutional quality index, providing a more holistic perspective. This unique approach contributes valuable insights into the environmental challenges faced by the Indian economy, offering a nuanced understanding of the complex dynamics of environmental degradation in this region.

Renewable and non-renewable energy consumption in Bangladesh: The relative influencing profiles of economic factors, urbanization, physical infrastructure and institutional quality

PurposeThis study is intended to analyze the impact of information and communication technology (ICT) infrastructure, technological innovation, renewable energy consumption and financial development on carbon dioxide emissions in emerging economies.Design/methodology/approachThe present study adopts the autoregressive distributed lag (ARDL) cointegration technique for the annual data collection of Vietnam from 1990 to 2020.FindingsThe results of the study unveil that renewable energy consumption, the interaction between renewable energy consumption and ICT infrastructure and financial development have significant predictive power for carbon dioxide emissions. In the long term, renewable energy consumption, export and population growth reduce CO2 emissions, whereas the interaction between renewable energy consumption and ICT infrastructure and financial development increases CO2 emissions, while ICT infrastructure does not affect emissions. In the short run, changes in ICT infrastructure contribute to carbon dioxide emissions in Vietnam. In addition, changes in renewable energy consumption, financial development, the interaction between ICT infrastructure and renewable energy consumption and population growth have a significant effect on CO2 emissions. Notably, technological innovation has no impact on CO2 emissions in both the short and long run.Originality/valueThe current study provides new insights into the environmental effects of ICT infrastructure, technological innovation, renewable energy consumption and financial development. The interaction between renewable energy consumption and ICT infrastructure has a significant effect on carbon dioxide emissions. The paper suggests important implications for setting long-run policies to boost the effects of financial development, renewable energy consumption and ICT infrastructure on environmental quality in emerging countries like Vietnam in the coming time.

This paper examines the interplay among foreign direct investment (FDI), financial development, capital formation, and renewable energy consumption in the context of Bangladesh. The study uses empirical evidence to shed light on the nexus between these variables. Panel data analysis techniques investigate the relationship over a specific period. This research provides insights into Bangladesh's dynamic interactions among FDI, financial development, capital formation, and renewable energy consumption. The study reveals significant positive associations between FDI and renewable energy consumption, indicating that FDI inflows contribute to the growth and utilization of renewable energy sources. Moreover, the analysis uncovers a positive relationship between financial development and renewable energy consumption, suggesting that a well-developed financial sector facilitates the financing and implementation of renewable energy projects. Additionally, the study highlights the role of capital formation in promoting renewable energy consumption. The positive relationship between capital formation and renewable energy consumption indicates that investment in physical infrastructure and productive assets supports the expansion and utilization of renewable energy sources. This analysis provides empirical evidence of the interdependencies among FDI, financial development, capital formation, and renewable energy consumption in Bangladesh. Overall, the findings suggest that fostering FDI, improving financial sector development, and promoting capital formation are crucial for enhancing renewable energy consumption in Bangladesh. The study's conclusions have implications for policymakers and stakeholders in designing and implementing strategies to promote sustainable and renewable energy sources in the country.

Heterogeneous effect of eco-innovation and human capital on renewable & non-renewable energy consumption: Disaggregate analysis for G-7 countries

The study examined the dynamic nexus between carbon footprints, nonrenewable energy and renewable energy consumption, financial development and economic growth, and combating climate change by using a dataset of selected 13 Asian emerging economies (Bangladesh, China, India, Indonesia, Iran, Malaysia, Nepal, Pakistan, Philippines, South Korea, Sri Lanka, Thailand, and Vietnam) from 1995 to 2020. This study empirical analysis uses the second generation of panel cointegration techniques to compensate for cross-sectional dependency and slope heterogeneity. The mean group, the common correlated effects mean group, and the augmented mean group are used to estimate the long-run equations. The findings suggest that economic growth and nonrenewable energy consumption exacerbate environmental degradation, but renewable energy consumption mitigates the total adverse effects on the environment over time. Additionally, economy-specific findings examine how the impact of nonrenewable energy and renewable energy consumption on the carbon footprint depends on energy consumption level. Furthermore, the Dumitrescu-Hurlin causality test reveals a statistically significant bidirectional correlation between financial development, carbon footprints, economic growth, and consumption of nonrenewable energy and renewable energy. Finally, the study says that Asian emerging economies should use more renewable energy and be more efficient in order to reduce their carbon footprints.

This thesis investigates the dynamics between financial development, renewable energy consumption, and economic growth in comparative analyses across 123 countries from 1990 to 2017. In the comparative analyses, we considered four income groups, namely low-income (LIC), lower-middle-income (LMC), upper-middle-income (UMC) and high-income (HIC) countries, but also five major regions such as Asia Pacific (APA), Europe & Central Asia (ECS), America (AMA, North America & Latin America and The Caribbean), Middle-East and North Africa (MENA) and Sub-Saharan Africa (SSA). This research is motivated by the need to show whether financial development may contribute to the protection of the planet (clean energy) and the eradication of poverty around the world. We also highlight the importance of good governance quality and renewable energies for achieving sustainable development goals (SDGs). This project is in line with the SDGs initiated by the United Nations to arouse attention towards clean water and sanitation, decent work and economic growth, peace, justice, and strong institutions affordable and clean energy in response to global warming. Hence, energy-saving technologies, i.e., renewable energies and sustainable growth, may play critical roles in this regard. The scrutiny of the empirical literature reveals that few studies have examined the nonlinear relationship between financial development, renewable energy consumption and economic growth in comparative analyses across different income groups and different regions while considering the multidimensional aspects of financial development. Notably, this study analyzes the nonlinear effects of financial development on renewable energy consumption and economic growth using different financial indicators. In a disaggregated approach, we alternatively use these indicators to represent four aspects of financial development, i.e., financial depth, financial efficiency, financial inclusion, and financial stability. Besides, this study examines the moderating effect of the quality of governance of public institutions on the relationship between financial development, renewable energy consumption, and economic growth across income levels and regions, unlike previous studies. In an aggregated approach, we built composite indexes of financial development and governance quality using eight (8) financial variables and six (6) indicators of governance quality. We make these indexes through the principal component analysis (PCA) technique to derive the overall effect of financial development on renewable energy consumption and growth while avoiding multicollinearity problems and the arbitrary choices of variables. The study also includes ten (10) control variables to avoid bias arising from omitted variables. The different estimations were performed by using two-stage least squares (2SLS), difference-GMM and system-GMM in most cases to deal with endogeneity problems, as well as to provide robust and reliable results. We also examined the causal relationships between financial development, renewable energy consumption, and economic growth using the panel vector autoregressive model (Panel VAR) following a similar approach to Granger causality framework with the GMM models. The study also provides detailed discussions of the results and specific policy implications for achieving the sustainable development goals in response to global warming across countries. These policy implications are well discussed in the last section of this thesis.

Purpose This study aims to assess the nexus among output growth, renewable energy consumption, financial development and environmental quality (EQ) in the presence of non-renewable energy consumption for India using annual time series data for the period 1980–2021. Design/methodology/approach To conduct an econometric analysis, this study uses the augmented autoregressive distributed lag (AARDL) model, which offers the benefit of simultaneously estimating both long-run and short-run estimators. Furthermore, this study uses the Toda-Yamamoto (1995) test and the Breitung and Candelon (2006) test to explore causal relationships in both time and frequency domains (FDs), aiming to understand the dynamic associations between variables. Findings Using the AARDL model, the authors found that initially, with an increase in output growth, EQ deteriorates, but once output growth reaches a threshold level, EQ improves. Likewise, this study found that financial development enhances EQ. Furthermore, the authors found a unidirectional causality from the load capacity factor (LCF) to output growth, renewable energy consumption and non-renewable energy consumption in the case of time domain analysis, and no feedback causality was documented. In the FD causality approach, this study reveals a causality nexus from LCF to output growth, financial development and renewable energy consumption at low, middle and high frequencies. Practical implications The findings highlight the need for targeted policies to balance economic growth and environmental sustainability in India. Policymakers should promote green technologies and enhance renewable energy use to mitigate the initial negative impact of output growth on EQ. The positive role of financial development suggests that encouraging green financing and sustainable investments can further improve environmental outcomes. The Indian economy needs to prioritise sustainable growth in its financial sector by aligning it with ongoing transformative processes for sustainable development. To achieve the sustainable development goals pertaining to EQ, the Indian economy must diminish its reliance on fossil fuels. In addition, the government of India must provide financial assistance to environmental organisations to foster the LCF. Originality/value To the best of the authors’ knowledge, this is the first study to investigate the dynamic nexus among financial development, output growth, renewable energy consumption and EQ proxied by LCF within the Indian context in the presence of non-renewable energy consumption. Likewise, this study uses the LCF to assess environmental sustainability in India, offering a comprehensive evaluation by integrating both supply and demand dimensions. From a policy perspective, this study highlights the significance of fostering sustainable economic growth, implementing environmentally conscious banking policies, and adopting diversified and ecologically friendly strategies. These policy directions are essential for conserving ecological resources and fostering a more sustainable and resilient development trajectory for India.

This research examines the correlation between foreign direct investment (FDI), gross capital formation (GCF), financial development, and renewable energy consumption (REC). The research utilizes the CS-ARDL and NARDL estimates to identify a strong and statistically significant connection, both in the long-term and short-term, between Foreign Direct Investment (FDI), Gross Capital Formation (GCF), financial development, and Regional Economic Cooperation (REC). More precisely, a 10% alteration in Foreign Direct Investment (FDI) leads to a 1.545% augmentation in Research and Development Expenditure (REC) over an extended period of time, and a 0.735% boost in the immediate term. Likewise, favorable (unfavorable) advancements in foreign direct investment (FDI) hasten (diminish) the pace of economic growth in the long term. The analysis also demonstrates a strong and statistically significant relationship between GCF and REC, highlighting the advantageous impact of domestic capital creation on the integration of clean energy. Moreover, it reveals a favorable correlation between financial development and REC, indicating that the financial incentives enabled by financial development have a crucial impact on encouraging the use of renewable energy. These results are consistent with previous research and have important consequences for the connection between foreign direct investment (FDI), gross capital formation (GCF), financial development, and sustainable energy. Nonetheless, the study highlights the importance of taking into account the nature and caliber of foreign direct investment (FDI) inflows, the influence of fair and sustainable growth in the renewable energy sector on the environment and society, and the possible environmental and social consequences of renewable energy projects fueled by domestic capital expansion. Furthermore, it emphasizes the need of well-rounded policy frameworks and governance mechanisms to guarantee that foreign direct investment (FDI), green climate fund (GCF), and financial development effectively contribute to equitable and sustainable growth in the consumption of renewable energy. The study's findings offer valuable insights on how to effectively use foreign direct investment (FDI), global climate finance (GCF), and financial development to increase the use of renewable energy. However, it also emphasizes the importance of carefully evaluating the wider consequences and related factors in order to develop sustainable strategies for promoting renewable energy consumption.

This study analyzes the impact of energy security and geopolitical risks on energy consumption in countries with geopolitical risk from 1985 to 2021, with the aid of financial development, economic growth, and human capital as moderating variables. Employing robust panel data econometric techniques, the analysis reveals that heightened geopolitical risks and compromised energy security significantly affect energy consumption patterns. The increase in energy security risk by 1% has a dual impact on energy consumption patterns in countries with high geopolitical risk, as renewable energy consumption increases by 0.1227%, while non-renewable energy consumption also increases by 0.113%. As geopolitical risk increases by 1%, energy consumption patterns change, decreasing renewable and non-renewable energy consumption. Specifically, renewable energy consumption decreases by 0.00010% with a 1% rise in geopolitical risk. A 1% increase in financial development significantly impacts energy consumption in these countries. The adoption of sustainable energy solutions is positively correlated with the development of financial markets in high-risk countries, with non-renewable energy consumption decreasing by 0.0187% as financial development progresses. Additionally, an increase in economic growth of 1% leads to a 0.6750% increase in renewable energy consumption, indicating a preference for renewable sources as economies expand, aligning with global sustainability efforts. The findings underscore the importance of resilient energy policies considering geopolitical uncertainties while promoting sustainable economic development. This study offers critical insights for policymakers aiming to balance energy security with financial stability in geopolitically sensitive regions, providing a comprehensive framework to guide strategic decisions in the face of evolving global risks.

Environmental tax systems serve as a particularly effective mechanism for governments in mitigating ecological damage and achieving sustainable development. OECD countries account for nearly 70% of global energy-related CO2 emissions in 2024. Considerably high emissions underscore the ongoing necessity for OECD economies to examine environmental sustainability. A comprehensive investigation into the environmental taxation frameworks across OECD member states would provide insight into whether their tax policies reasonably promote their energy or technological innovations, thereby enhancing the efficacy of environmentally oriented tax regimes. This research primarily seeks to investigate how environmental related tax interacts with digital transformation processes and renewable energy utilization patterns to shape consumption-derived carbon dioxide emissions throughout OECD nations. This paper employs the Feasible Generalized Least Squares (FGLS) and Panel-Corrected Standard Error (PCSE) analytical models to examine the moderating role of environmental taxation on how digital technologies and renewable energy consumption in influencing carbon emissions in OECD economies. The empirical analysis draws upon longitudinal macro-panel datasets encompassing 32 OECD member countries over a two-decade period spanning from 2001 through 2021. The empirical evidence robustly demonstrated the regulatory effectiveness of environmental taxation mechanism, as it consistently exhibited a negative and statistically significant effect on emissions across various model specifications. Effective environmental related taxes can augment the ability of digital technology to foster environmental efficiency. In addition, environmental related taxes may increase emissions when applied concurrently with renewable energy consumption. Comprehensive policy strategies that include environmental taxation, digital transformation, and robust institutional frameworks are crucial for achieving significant environmental advancements and ongoing economic growth. Governments should consistently advocate for digital innovation and renewable energy consumption, but these initiatives must be supported by more optimal environmental tax policies.