Renewable-nonrenewable energy: institutional quality and environment nexus in South Asian countries

Abstract

Today energy has become a fundamental need; without energy consumption, no country can survive economically. Along with developed economies, developing countries are struggling more to achieve sustainable economic growth. Therefore, different strategies are being made to develop renewable energy for economic gains. In this line, this study attempts to investigate the impacts of nonrenewable and renewable energy and other socioeconomic factors on CO2 emissions in South Asian countries. The annual data was converted into quarterly data of 1996Q1-2019Q4. The unit root test with structural breaks confirmed mix order of integration and further ARDL approach was applied to know the long- and short-run associations. The long-run association shows that economic growth in Bangladesh, Pakistan, and Sri Lanka is not sustainable. Nepal is achieving economic growth with reducing CO2 emissions. In India, Sri Lanka, and Nepal, institutional quality can play an important role to achieve cleaner production. In Pakistan and Bangladesh, population growth is also lowering CO2 emissions. In India, Sri Lanka, and Nepal, nonrenewable energy usage is contributing to environmental pollution and renewable energy is lowering it. These countries need to enhance the ratio of renewable energy to their industrial production units.

Keywords: ARDL; Nonrenewable energy; Renewable energy; South Asian countries; Sustainable development.