The influences of renewable electricity generation, technological innovation, financial development, and economic growth on ecological footprints in ASEAN-5 countries.

Abstract

The Southeast Asian countries have experienced significant degrees of economic growth over the years but have not managed to safeguard their environmental attributes in tandem. As a result, the aggravation of the environmental indicators across this region casts a shadow of doubt on the sustainability of the economic growth achievements of the Southeast Asian countries. Against this milieu, this study specifically explores the influence of renewable electricity generation capacity, technological innovation, financial development, and economic growth on the ecological footprints in five Southeast Asian countries namely Indonesia, Malaysia, the Philippines, Thailand, and Vietnam during the period 1985-2016. One of the major novelties of this study is in terms of its approach to assess the renewable energy use-ecological footprint nexus using the renewable electricity generation capacity as an indicator of renewable energy use in the selected Southeast Asian nations. The econometric analysis involves methods that are robust to handling cross-sectional dependency and slope heterogeneity issues in the data. Accordingly, the recently developed Cross-sectional Augmented Autoregressive Distributed Lag estimator is used to predict the short- and long-run impacts on ecological footprints. The major findings suggest that higher renewable electricity generation capacity and technological innovation reduce ecological footprints, while higher financial development and economic growth increase the ecological footprints. Therefore, these findings imply that in forthcoming years, the selected Southeast Asian countries will need to tackle the environmental adversities by enhancing their renewable electricity generation capacities, increasing investment in technological development, greening the financial sector, and adopting environmentally-friendly growth policies. Hence, the implementation of relevant policies, in this regard, can be expected to ensure complementarity between economic growth and environmental welfare across Southeast Asia.