Is Renewable Energy or Fossil Fuels Preferred in the Development of Asian Countries?

Yıl 2025, Cilt: 8 Sayı: 3, 18 - 39, 02.07.2025

İbrahim Halil Sugözü , İraima Dorbonova

https://doi.org/10.59445/ijephss.1698154

Öz

The goal of all countries is to reduce dependence on fossil fuels and promote renewable energy consumption. Renewable energy sources occur naturally and have unlimited production potential, making them ideal for industrial, residential and transportation use. Unlike renewable energy, fossil fuel reserves are limited, depletable and cause environmental pollution. The aim of this study is to investigate the impact of gross domestic product, foreign direct investment, financial development and other proposed variables on renewable energy consumption in 26 Asian countries. We used panel data and estimated regressions using the Driscoll-Kraay method for the period 2000-2020. The panel regression results show that gross domestic product has a significantly negative relationship on renewable energy consumption; likewise, both gross capital formation and financial development are found to negatively affect renewable energy consumption. The findings show that economic and financial development in Asian countries has not yet promoted renewable energy consumption. It shows that in the current economic and financial situations of countries, the trend towards using more fossil fuels as a share of total energy resources continues.

Anahtar Kelimeler

Renewable energy , Fossil fuels , Growth , Asian countries

Etik Beyan

It is declared that scientific and ethical principles have been followed while carrying out and writing this study and that all the sources used have been properly cited.

Destekleyen Kurum

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Asya Ülkelerinin Kalkınmasında Yenilenebilir Enerji mi Yoksa Fosil Yakıtlar mı Tercih Ediliyor?

Öz

Tüm ülkelerin hedefi fosil yakıtlara olan bağımlılığı azaltmak ve yenilenebilir enerji tüketimini teşvik etmektir. Yenilenebilir enerji kaynakları doğal olarak oluşur ve sınırsız üretim potansiyeline sahiptir, bu da onları endüstriyel, konut ve ulaşım kullanımı için ideal hale getirir. Yenilenebilir enerjinin aksine, fosil yakıt rezervleri sınırlıdır, tükenebilir ve çevre kirliliğine neden olur. Bu çalışmanın amacı, 26 Asya ülkesinde gayrisafi yurtiçi hasıla, doğrudan yabancı yatırım, finansal kalkınma ve önerilen diğer değişkenlerin yenilenebilir enerji tüketimi üzerindeki etkisini araştırmaktır. Çalışmada 2000-2020 yılları arasındaki panel veriler kullanılmış ve Driscoll-Kraay yöntemi kullanılarak regresyonlar tahmin edilmiştir. Panel regresyon sonuçları, gayrisafi yurtiçi hasılanın yenilenebilir enerji tüketimi üzerinde önemli bir negatif etkiye sahip olduğunu göstermektedir; benzer şekilde, hem gayrisafi sermaye oluşumunun hem de finansal kalkınmanın yenilenebilir enerji tüketimini olumsuz etkilediği bulunmuştur. Bulgular, Asya ülkelerindeki ekonomik ve finansal kalkınmanın yenilenebilir enerji tüketimini teşvik etmediği anlamına gelmektedir. Ülkeler ekonomik ve finansal olarak geliştikçe, toplam enerji kaynaklarının bir payı olarak daha fazla fosil yakıt kullanma eğilimindedirler.

Anahtar Kelimeler

Yenilenebilir enerji , Fosil yakıtlar , Büyüme , Asya ülkeleri

Etik Beyan

Bu çalışmanın hazırlanma sürecinde bilimsel ve etik ilkelere uyulduğu ve yararlanılan tüm çalışmaların kaynakçada belirtildiği beyan olunur.

Destekleyen Kurum

Çalışma, kamusal, özel, ticari nitelikte ya da kâr amacı gütmeyen herhangi bir kurumdan destek alınmadan hazırlanmıştır.

Kaynakça

• Aboagye, S. & Kwakwa, A. P. (2023). The role of international tourism, trade openness and renewable energy in the financial development of selected African countries, Research in Globalization, 7, 1-12.
• Acemoglu, D., Aghion, P., & Hemous, D. (2013). The environment and directed technical change in a North-South model. Massachusetts Institute of Technology.
• Aghion, P., Hepburn, C., Teytelboym, A., & Zenghelis, D. (2014). Path dependence, innovation and the economics of climate change (Policy Paper). Centre for Climate Change Economics and Policy & Grantham Research Institute on Climate Change and the Environment.
• Akpanke, T. A., Deka, A., Ozdeser, H., & Seraj, M. (2023). Does foreign direct investment promote renewable energy use? An insight from West African countries. Renewable Energy Focus, 44, 124-131.
• Ali, M., Xiaoying, L., Mehmood, S., Khan, M. A., & Oláh, J. (2025). Assessing the impact of FDI, CO2 emissions, economic growth, and income inequality on renewable energy consumption in Asia. Energy Strategy Reviews, 58, 1-18.
• ASEAN Centre for Energy (2020). The 6th ASEAN Energy Outlook 2020–2040. Jakarta: ACE.
• Baltagi, B. H., & Wu, P. X. (1999). Unequally spaced panel data regressions with AR (1) disturbances. Econometric theory, 15(6), 814-823.
• Bhargava, A., Franzini, L., & Narendranathan, W. (1982). Serial correlation and the fixed effects model. The review of economic studies, 49(4), 533-549.
• BloombergNEF. 2024. Asia Pacific’s Energy Transition Outlook: Pathways to Net Zero. Bloomberg Finance L.P.
• Bull, S. R. (2001). Renewable energy today and tomorrow. Proceedings of the IEEE, 89(8), 1216-1226.
• Cosmi, C., Macchiato, M., Mangiamele, L., Marmo, G., Pietrapertosa, F., & Salvia, M. (2003). Environmental and economic effects of renewable energy sources use on a local case study. Energy Policy 31(5), 443-457.
• De Hoyos, Rafael E., and Vasilis Sarafidis. "Testing for cross-sectional dependence in panel-data models." The stata journal, 6(4), 482-496.
• Dimnwobi, S.K., Madichie, C.V., Ekesiobi, C., & Asongu, S.A. (2022). Financial development and renewable energy consumption in Nigeria. Renewable Energy, 192, 668-677.
• Driscoll, J. C., & Kraay, A. C. (1998). Consistent covariance matrix estimation with spatially dependent panel data. Review of economics and statistics, 80(4), 549-560.
• Duggal, V. K. (2023). Carbon Pricing Development and Dynamics: Implications for Developing Asia. Manila: Asian Development Bank.
• Dumitrescu, E.I., & Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels. Economic modelling, 29(4), 1450-1460.
• Eren, B.M., Taspinar, N., & Gokmenoglu, K.K. (2019). The impact of financial development and economic growth on renewable energy consumption: Empirical analysis of India. Science of the Total Environment, 663, 189-197.
• Farhad, S., Saffar‐Avval, M., & Younessi‐Sinaki, M. (2008). Efficient design of feedwater heaters network in steam power plants using pinch technology and exergy analysis. International journal of energy research, 32(1), 1-11.
• Grossman, G. M., & Krueger, A. B. (1995). Economic growth and the environment. The Quarterly Journal of Economics, 110(2), 353–377. https://doi.org/10.2307/2118443
• Hausman, J.A. (1978). Specification tests in econometrics. Econometrica: Journal of the econometric society, 1251-1271.
• Hoechle, D. (2007). Robust standard errors for panel regressions with cross-sectional dependence. The Stata Journal, 7(3), 281-312.
• Im, K.S., Pesaran, M.H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of econometrics, 115(1), 53-74.
• IRENA (International Renewable Energy Agency) and ACE (ASEAN Centre for Energy) (2022). Renewable Energy Outlook for ASEAN: Towards a Regional Energy Transition. Abu Dhabi: IRENA.
• Islam, S., Raihan, A., Ridwan, M., Rahman, M. S., Paul, A., Karmakar, S., ... & Jubayed, A. A. (2023). The influences of financial development, economic growth, energy price, and foreign direct investment on renewable energy consumption in the BRICS. Journal of Environmental and Energy Economics, 2(2), 17-28.
• Kamau, J. (2024). Efficiency of Renewable Energy Sources in Reducing Carbon Footprint in Developing Countries. International Journal of Environmental Sciences 7(2), 1-12.
• Khan, A., Chenggang, Y., Hussain, J., & Kui, Z. (2021). Impact of technological innovation, financial development and foreign direct investment on renewable energy, non-renewable energy and the environment in belt & Road Initiative countries. Renewable Energy, 171, 479-491.
• Khan, A., Hussain, J., Bano, S., & Chenggang, Y. (2020). The repercussions of foreign direct investment, renewable energy and health expenditure on environmental decay? An econometric analysis of B&RI countries. Journal of Environmental Planning and Management, 63(11), 1965-1986.
• Khan, R. Z., Lutfi A. R., and Gamini P. (2025). Green Growth and Sustainability: A Systematic Literature Review on Theories, Measures and Future Directions. Cleaner and Responsible Consumption, 17, 1-16.
• Kutan, A. M., Paramati, S. R., Ummalla, M., & Zakari, A. (2018). Financing renewable energy projects in major emerging market economies: Evidence in the perspective of sustainable economic development. Emerging Markets Finance and Trade, 54(8), 1761-1777.
• Lin, B., & Okoye, J.O. (2023). Towards renewable energy generation and low greenhouse gas emission in high-income countries: Performance of financial development and governance. Renewable Energy, 215, 1-11.
• Maarof, M. A., Ahmed, D. H., & Samour, A. (2023). Fiscal policy, oil price, foreign direct investment, and renewable energy- A path to sustainable development in South Africa. Sustainability, 15(12), 1-16.
• Manuel, F., & Vance, C., (2010) Fixed, random, or something in between? A variant of Hausman's specification test for panel data estimators. Economics Letters, 107(3), 327-329.
• Mukhtarov, S., Humbatova, S., Hajiyev, N.G.O., & Aliyev, S. (2020). The financial development-renewable energy consumption nexus in the case of Azerbaijan. Energies, 13(23), 1-14.
• Nawaz, A., & Rahman, M.M. (2023). Renewable energy consumption in Sub-Saharan Africa: The role of human capital, foreign direct investment, financial development, and institutional quality. Energy Reports, 10, 3383-3393.
• Nguyen, D. B., Nong D., Siriwardana, M., and Pham, H. T. (2023). Insights from ASEAN-wide emissions trading schemes (ETSs): A general equilibrium assessment. Energy Policy, 178, 1-10.
• Nor, B. A., & Hassan Mohamud, I. (2024). Assessing the influence of foreign direct investment on renewable energy consumption in Somalia: an ARDL model analysis. International Journal of Sustainable Energy, 43(1), 1-15.
• Our World in Data (2025a). Share of primary energy consumption from fossil fuels, https://ourworldindata.org/grapher/fossil-fuels-share-energy
• Our World in Data (2025b). Share of primary energy consumption from renewable energy, https://ourworldindata.org/renewable-energy
• Pesaran, H. (2004). General Diagnostic Tests for Cross Section Dependence in Panels. CESifo Working Papers. 69. https://www.doi.org/10.2139/ssrn.572504
• Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of applied econometrics, 22(2), 265-312.
• Pesaran, M.H., Ullah, A., & Yamagata, T. (2008). A bias‐adjusted LM test of error cross‐section independence. The econometrics journal, 11(1), 105-127.
• Popp, D., Ivan H., & Neelakshi M. (2011). Technology and the diffusion of renewable energy." Energy Economics, 33(4), 648-662.
• Raheem, I.D., Bello, A.K., & Agboola, Y.H. (2020). A new insight into oil price-inflation nexus. Resources Policy, 68, 1-9.
• Rahman, M. M., & Sultana, N. (2022). Impacts of institutional quality, economic growth, and exports on renewable energy: Emerging countries perspective. Renewable Energy, 189, 938-951.
• Salisu, A.A., Isah, K.O., Oyewole, O.J., & Akanni, L.O. (2017). Modelling oil price-inflation nexus: The role of asymmetries. Energy, 125, 97-106.
• Samour, A., Başkaya, M. M., & Tursoy, T. (2022). The impact of financial development and FDI on renewable energy in the UAE: A path towards sustainable development. Sustainability, 14(3), 1-14.
• Saygin, O., & Iskenderoglu, O. (2022). The nexus between financial development and renewable energy consumption: a review for emerging countries. Environmental Science and Pollution Research, 29(10), 14522-14533.
• Sek, S.K. (2017). Impact of oil price changes on domestic price inflation at disaggregated levels: Evidence from linear and nonlinear ARDL modeling. Energy, 130, 204-217.
• Shah, M. H., Salem, S., Ahmed, B., Ullah, I., Rehman, A., Zeeshan, M., & Fareed, Z. (2022). Nexus between foreign direct investment inflow, renewable energy consumption, ambient air pollution, and human mortality: a public health perspective from non-linear ARDL approach. Frontiers in public health, 9, 814208.
• Shahbaz, M., Topcu, B.A., Sarıgül, S.S., & Vo, X.V. (2021). The effect of financial development on renewable energy demand: The case of developing countries. Renewable Energy, 178, 1370-1380.
• Sun, Z., Zhang, X., & Gao, Y. (2023). The Impact of Financial Development on Renewable Energy Consumption: A Multidimensional Analysis Based on Global Panel Data. International Journal of Environmental Research and Public Health, 20(4), 3124, 1-20. https://doi.org/10.3390/ijerph20043124
• Tatoğlu, F. Y. (2012). Panel Data Econometrics Stata Applied [Panel Veri Ekonometrisi Stata Uygulamalı]. İstanbul: Beta Yayınevi.
• Tugcu, C. T. (2018). Panel data analysis in the energy-growth nexus (EGN). In The economics and econometrics of the energy-growth nexus. Edited by: Angeliki N. Menegaki, Academic Press, 255-271. ISBN 9780128127469.
• Usman, M., Kousar, R., Makhdum, M. S. A., Yaseen, M. R., & Nadeem, A. M. (2022). Do financial development, economic growth, energy consumption, and trade openness contribute to increase carbon emission in Pakistan? An insight based on ARDL bound testing approach. Environment, Development and Sustainability, 1-30.
• Westerlund, J. (2007). Testing for error correction in panel data. Oxford Bulletin of Economics and statistics, 69(6), 709-748.
• Yadav, A., Bekun, F. V., Ozturk, I., Ferreira, P. J. S., & Karalinc, T. (2024). Unravelling the role of financial development in shaping renewable energy consumption patterns: Insights from BRICS countries. Energy Strategy Reviews, 54, 1-9.