Determinants of the renewable energy consumption: The case of Asian countries

Pham Xuan Hoa; Vu Ngoc Xuan; Nguyen Thi Phuong Thu

doi:10.1016/j.heliyon.2023.e22696

Determinants of the renewable energy consumption: The case of Asian countries

Heliyon. 2023 Nov 24;9(12):e22696. doi: 10.1016/j.heliyon.2023.e22696. eCollection 2023 Dec.

Authors

Pham Xuan Hoa¹, Vu Ngoc Xuan², Nguyen Thi Phuong Thu³

Affiliations

¹ Department of Public Finance, School of Banking and Finance, National Economics University, Viet Nam.
² Department of Microeconomics, Faculty of Economics, National Economics University, Viet Nam.
³ Department of Public Economics, Faculty of Development Economics, National Economics University, Viet Nam.

Abstract

In recent year, Asia has rapid economic growth and policy makers care about the renewable energy consumption. The motivation about the choice of variables with theory and empirical backing on the subject in the manuscript is the theory of Cobb- Douglas function and determinants of renewable energy consumption in the Asian countries. This paper investigates the nexus of electricity consumption, fossil fuel consumption, foreign direct investment inflows, economic growth, and renewable energy consumption in Asian countries. Utilizing panel data analysis, the study finds significant interrelationships among these factors and highlights their implications for energy policy and sustainable development in the region. This article aims to use the Cobb- Douglas Model to analyze the factors affecting renewable energy consumption at Asian developed countries for sustainable development goals. This study collected data from World Bank in the period 2000-2020 of 06 developed countries such as Japan, Korea, Singapore, Hong Kong, Israel and China. The empirical research results show that the electricity consumption, fossil fuel consumption, foreign direct investment inflows, economic growth affect the environmental pollution in 06 Asian developed countries. The electricity consumption, foreign direct investment inflows, economic growth positively affect to the renewable energy consumption. If the electricity consumption increases 1 % then the renewable energy consumption up 0.6 %; if the foreign direct investment inflows up 1 % then the renewable energy consumption up 0.82 %; If the economic growth up 1 % then renewable energy up 2.73 %. In addition, fossil fuel consumption negatively affects the renewable energy consumption. If the fossil fuel consumption increases 1 % then the renewable energy consumption down 0.26 %. The paper offers conclusions and recommendations for Asian countries to address these interconnected issues and transition towards a more sustainable energy future.

Keywords: Economic growth; Foreign direct investment inflows; Fossil fuel consumption; electricity consumption.