Linking Non Renewable Energy, Renewable Energy, Globalization and CO2 Emission under EKC Hypothesis: Evidence from ASEAN-6 Countries through Advance Panel Estimation

Southeast Asian countries have seen substantial economic growth over the years, but they have not been able to maintain environmental quality at the same time. Non-renewable sources constitute a significant proportion of energy consumption in the ASEAN which can have repercussions for long-term sustainable development. While the impacts of energy consumption and economic growth on environmental quality have been studied before, literature is quiet about the nexus between globalization, renewable and non-renewable energy, economic growth, and CO2 emissions in the ASEAN context. To fill in this gap in the literature, the present study estimates the effect of globalization, economic growth, and renewable and non-renewable energy on CO2 emission under the umbrella of the EKC hypothesis over the 1995 to 2020 period. Due to the presence of cross-sectional dependence and heterogeneity of slope parameters, second-generation techniques of co-integration, unit root, and long and short-run estimations are used. According to the findings of CS-ARDL estimation, non-renewable energy and globalization contribute to environmental deterioration, whereas renewable energy has a positive contribution to environmental quality improvement in ASEAN countries. Moreover, the findings prove the validation of the EKC hypothesis in the selected economies. The study concludes that the region is developing at the expense of environmental quality while also pursuing enormous globalization initiatives. The policy implications and directions of the findings for sustainable development are discussed.