The role of renewable, non-renewable energy consumption, trade, economic growth, and urbanization in achieving carbon neutrality: A comparative study for South and East Asian countries.

Abstract

This study uses a comparative approach for comparing the nexus of economic growth, renewable and nonrenewable energy consumption, urbanization, trade, and CO2 emissions for South and East Asian countries from 2000 to 2018. The short- and long-run connections between the variables are explored using the dynamic common correlated effects (DCCE) CS-ARDL approach, and the causal linkages are assessed using the Dumitrescu-Hurlin (DH) panel causality test. The data show that the factors have long-term relationships. The findings show that nonrenewable energy consumption and economic growth increase long-term CO2 emissions in South Asia, but trade and use of renewable energy consumption reduce CO2 emissions in the short term. Long-term causal relationships between CO2 emissions, renewable energy use, economic growth, and trade are also revealed by the South Asian causality test. In East Asia, economic growth, NREC, trade, and urbanization increased CO2 emissions in the short and long run, while REC appears to reduce CO2 emissions. According to the causality analysis, long-run bidirectional causation exists between CO2 emissions, renewable energy use, economic growth, and trade. Furthermore, policy suggestions may be made, such as using renewable energy sources to lessen CO2 emissions and improving education and corruption to forecast economic growth in the examined areas.