The Nexus Between Urbanization, Renewable Energy Consumption, Financial Development, and Co2 Emissions: Evidence From Selected Asian Countries

Abstract

In terms of attaining the objectives of Sustainable Development Goals (SDGs), the Asian economies are considered as laggards, and one of the major problems faced by these economies is the issue of environmental degradation. For addressing this pertaining issue, a policy-level reorientation might be necessary. In this view, this study aims to explore the impact of urbanization, renewable energy consumption, financial development, agriculture, and economic growth on CO2 emissions in 15 Asian economies over 1990-2014. The empirical evidence demonstrates that urbanization, financial development, and economic growth increase CO2 emissions, renewable energy consumption reduces CO2 emissions, and the impact of agriculture is insignificant. Impulse response function and variance decomposition techniques are used to test the causality among the variables. Based on the study outcomes, a comprehensive SDG-oriented policy framework has been recommended, so that these economies can make progression toward attaining the objectives of SDG 13 and SDG 7. This study contributed to the literature by recommending this SDG-oriented policy framework, which encapsulates economic growth and its drivers.