Urbanization, trade openness, and industrialization as a determent of clean energy consumption: Evidence from BRI nations

Abstract

Energy and economic policies should include the intricate interconnections among urbanization, trade openness, industry, and the utilization of renewable energy. This study investigates the intricate connections among nations involved in the Belt and Road Initiative (BRI). The study employed panel econometric techniques, including DSUR, Cup-BC, and CUP-FM, to document independent variables' elasticities. Study findings suggest that urbanization is initially negatively correlated with renewable energy consumption (REC) because of the rising demand for energy, particularly non-renewable sources. Urbanization beyond a certain threshold fosters renewable energy, showcasing the positive effects of Renewable Energy Certificates (RECs). The influence of urbanization on energy use has changed throughout time. Furthermore, there is an initial positive relationship between trade openness and REC, indicating that adopting liberalized trade policies encourages the use of clean energy. Nevertheless, over time, this connection becomes less strong, suggesting a critical moment when the promotion of trade openness may lead to an increase in the use of non-renewable resources. Industrialization first stimulates the need for traditional energy sources but ultimately encourages using renewable energy. The U-invert connection demonstrates the interplay between industrialization and energy consumption patterns, emphasizing the need for flexible policies. Our study assists policymakers and stakeholders in effectively addressing energy sustainability concerns related to the Belt and Road Initiative (BRI).