The response of energy aid and natural resources consumption in load capacity factor of the Asia Pacific emerging countries

Abstract

Researchers have frequently raised questions about the capacity of CO2 emissions to depict the state of environmental quality comprehensively. The study responds to this gap by recommending a novel instrument, Load Capacity Factor (LCF), to precisely evaluate the ecological implications of energy aid (EA) and natural resources extraction for environmental quality in 34 Asia Pacific countries (APAC) between 2002 and 2021. Applying the instrumental variable GMM, the present estimations respond that environmental quality (LCF) suffered significantly due to energy aid (0.0259%) and natural resources (0.0557%) in the candidate countries. These outcomes are further corroborated by the heterogeneity analysis based on income and region. The addition of moderators, including the rule of law and political stability, steered the relationship between EA and LCF in a positive direction. The findings imply that policy alignment is crucial to operationalising energy aid and natural resources to achieve sustainable economic development in the sampled group.