Investigating the Effect of Renewable Energy Utilization and Trade Openness Towards the Economic Growth and Environmental Quality in South Asia: A Comparative Study for South Asian Countries

##plugins.themes.academic_pro.article.sidebar##

Published Jun 1, 2024
https://doi.org/10.61506/02.00231
Download
PDF
Statistic
Vol. 10 No. 2 (2024): Journal of Policy Research

##plugins.themes.academic_pro.article.main##

Ibrahim Omar Almajali
School of Economics and Trade, Hunan University, Changsha 410006, China
Ali Husain Ahmed
School of Economics and Trade, Hunan University, Changsha 410006, China
Ahmed Alhayky
School of Economics and Trade, Hunan University, Changsha 410006, China
Raad Abdelhalim Ibrahim Alsakarneh
Management, China Institute of Development Strategy and Planning, Wuhan University, Wuhan, 430072, China

Abstract

This study aims to investigate the relationship between trade openness and the use of renewable energy sources and South Asia's economic growth and environmental quality. Since renewable energy offers a more sustainable and environmentally friendly option than fossil fuels, it becomes essential to attaining sustainable development. Using renewable energy has grown in popularity as a global solution to the urgent problems of energy security, climate change, and environmental sustainability. Renewable energy must be used by South Asian nations in order to reduce greenhouse gas emissions, maintain long-term energy security, and promote economic resilience. Incorporating renewable energy could enhance the country's energy situation, lessen dependency on imported fossil fuels, and open up new business prospects. Data on the use of renewable energy is gathered for the variable of renewable energy use. Data regarding GDP is gathered for the gross domestic product variable using current US dollars. The Energy Information Administration is the source of the data regarding the use of renewable energy (EIA). Additionally, the World Development Indicators database (WDI) is where the GDP and trade openness data are gathered. The following nations are represented in the data, which was gathered between 2001 and 2020: Bangladesh, India, Nepal, Sri Lanka, and Pakistan.  We investigated the long-term relationship between energy consumption, economic growth, and environmental quality in this analysis using the Panel ARDL approach. The dependent variables in the equation above are the environmental quality and economic growth of the Asian developing nations that were chosen for analysis. According to the study's conclusion, TO, GDP, and RNW have long-term negative effects on the environment since they raise CO2. Conversely, RNW reduces CO2, however the effect is negligible compared to other relevant variables. While the results of the CD test show the presence of CSD, the Pedroni Panel Cointegration Test reveals long-run cointegration of a series. The correlation matrix displays the relationship between the variables. The result showed how strongly, negatively, or positively the factors linked with one another. Additionally, there is a substantial positive correlation between GDP and carbon dioxide, its dependent variable. Additionally, RNW are found to be directly related to one another. Both the TO and GDP have a strong and direct correlation, and there is a positive and significant relationship between GDP and RNW. The other cross-sections are connected to this one. They are interdependent and have an impact on one another. Using South Asia as a focus, this study looks at how trade openness and the use of renewable energy affect environmental quality and economic growth in nations including Bangladesh, India, Nepal, Bhutan, and the Maldives.

##plugins.themes.academic_pro.article.details##

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite
[1]
Omar Almajali, I., Husain Ahmed, A., Alhayky, A. and Abdelhalim Ibrahim Alsakarneh, R. 2024. Investigating the Effect of Renewable Energy Utilization and Trade Openness Towards the Economic Growth and Environmental Quality in South Asia: A Comparative Study for South Asian Countries. Journal of Policy Research. 10, 2 (Jun. 2024), 259–270. DOI:https://doi.org/10.61506/02.00231.
Crossref
Scopus
Google Scholar
Europe PMC

References

  1. ABEYSEKARA, N. & BANDARA, Y. 2022. Untold Story of Sri Lanka: Paradox in Education, ICT and Development in Post—Colony. Managing the Post-Colony South Asia Focus: Ways of Organising, Managing and Living. Springer. DOI: https://doi.org/10.1007/978-981-19-2988-5_4
  2. ADEJUMO, O. O. 2020. Environmental quality vs economic growth in a developing economy: complements or conflicts. Environmental Science and Pollution Research, 27, 6163-6179. DOI: https://doi.org/10.1007/s11356-019-07101-x
  3. AHMAD, F., DRAZ, M. U., CHANDIO, A. A., AHMAD, M., SU, L., SHAHZAD, F. & JIA, M. 2022. Natural resources and environmental quality: exploring the regional variations among Chinese provinces with a novel approach. Resources Policy, 77, 102745. DOI: https://doi.org/10.1016/j.resourpol.2022.102745
  4. AHMED, F., ALI, I., KOUSAR, S. & AHMED, S. 2022. The environmental impact of industrialization and foreign direct investment: empirical evidence from Asia-Pacific region. Environmental Science and Pollution Research, 1-15. DOI: https://doi.org/10.1007/s11356-021-17560-w
  5. ALI, M., KHAN, Z. H. & HOSSAIN, M. E. 2022. Comparative Advantage, Export Diversification, Intra-Industry Trade, and Economic Growth Nexus: Evidence from Bangladesh's Textile and Clothing Industry. AIUB Journal of Business and Economics, 19, 226-250.
  6. ARIF, A., SADIQ, M., SHABBIR, M. S., YAHYA, G., ZAMIR, A. & BARES LOPEZ, L. 2022. The role of globalization in financial development, trade openness and sustainable environmental-economic growth: evidence from selected South Asian economies. Journal of Sustainable Finance & Investment, 12, 1027-1044. DOI: https://doi.org/10.1080/20430795.2020.1861865
  7. BOND-SMITH, S. & MCCANN, P. 2021. Incorporating space in the theory of endogenous growth: Contributions from the new economic geography. Handbook of Regional Science, 635-659. DOI: https://doi.org/10.1007/978-3-662-60723-7_14
  8. CAI, X., ZHU, B., ZHANG, H., LI, L. & XIE, M. 2020. Can direct environmental regulation promote green technology innovation in heavily polluting industries? Evidence from Chinese listed companies. Science of the total environment, 746, 140810. DOI: https://doi.org/10.1016/j.scitotenv.2020.140810
  9. CHAPAGAIN, P. S. & AASE, T. H. 2020. Changing forest coverage and understanding of deforestation in Nepal Himalayas. Geographical Journal of Nepal, 13. DOI: https://doi.org/10.3126/gjn.v13i0.28133
  10. CHAUDHARY, R. P., UPRETY, Y., ACHARYA, H. R. & RIMAL, S. K. 2023. Deforestation in Nepal: status, causes, consequences, and responses. Biological and Environmental Hazards, Risks, and Disasters. Elsevier. DOI: https://doi.org/10.1016/B978-0-12-820509-9.00003-4
  11. CHU, X., CUI, W., XU, S., ZHAO, L., GUAN, H. & GE, Y. 2023. Multiscale Time Series Decomposition for Structural Dynamic Properties: Long‐Term Trend and Ambient Interference. Structural Control and Health Monitoring, 2023, 6485040. DOI: https://doi.org/10.1155/2023/6485040
  12. CUSSER, S., HELMS IV, J., BAHLAI, C. A. & HADDAD, N. M. 2021. How long do population level field experiments need to be? Utilising data from the 40‐year‐old LTER network. Ecology Letters, 24, 1103-1111. DOI: https://doi.org/10.1111/ele.13710
  13. DHARMADASA, R. & KARUNARATHNA, G. 2022. Migration, remittances and household welfare: evidence from Sri Lanka. Economic Research, 10, 1. DOI: https://doi.org/10.4038/sljer.v10i1.174
  14. DIMENNA, J. 2022. Globalization and Trade Liberalization: The Impact on Bangladesh's Textile Industry.
  15. EYÜBOĞLU, S. & UYSAL, S. Y. 2022. Examining the Relationship between Preprimary Education and Economic Growth in Developing Countries. Akademik Araştırmalar ve Çalışmalar Dergisi (AKAD), 14, 468-484. DOI: https://doi.org/10.20990/kilisiibfakademik.1151440
  16. GHORASHI, A. H. & MARANLOU, H. 2021. Essential infrastructures and relevant policies for renewable energy developments in oil-rich developing countries: Case of Iran. Renewable and Sustainable Energy Reviews, 141, 110839. DOI: https://doi.org/10.1016/j.rser.2021.110839
  17. HE, A., XUE, Q., ZHAO, R. & WANG, D. 2021. Renewable energy technological innovation, market forces, and carbon emission efficiency. Science of The Total Environment, 796, 148908. DOI: https://doi.org/10.1016/j.scitotenv.2021.148908
  18. HO, T. L. & HO, T. T. 2021. Economic growth, energy consumption and environmental quality: Evidence from vietnam. International Energy Journal, 21, 213-224.
  19. HULIO, Z. H., JIANG, W. & CHANDIO, G. S. 2022. Power policies, challenges, and recommendations of renewable resource assessment in Pakistan. Energy Exploration & Exploitation, 40, 947-976. DOI: https://doi.org/10.1177/01445987211064678
  20. IKE, G. N., USMAN, O., ALOLA, A. A. & SARKODIE, S. A. 2020. Environmental quality effects of income, energy prices and trade: the role of renewable energy consumption in G-7 countries. Science of the Total Environment, 721, 137813. DOI: https://doi.org/10.1016/j.scitotenv.2020.137813
  21. ISLAM, M. M. 2024. An empirical analysis of foreign direct investment, ready-made garment exports, and employment in Bangladesh. Journal of International Economics and Management, 24, 17-39. DOI: https://doi.org/10.38203/jiem.024.1.0078
  22. ISLAM, M. S. 2021. Ready-made garments exports earning and its contribution to economic growth in Bangladesh. GeoJournal, 86, 1301-1309. DOI: https://doi.org/10.1007/s10708-019-10131-0
  23. JABEEN, G., AHMAD, M. & ZHANG, Q. 2021. Factors influencing consumers’ willingness to buy green energy technologies in a green perceived value framework. Energy Sources, Part B: Economics, Planning, and Policy, 16, 669-685. DOI: https://doi.org/10.1080/15567249.2021.1952494
  24. JAN, M. Z., ULLAH, K., ABBAS, F., KHALID, H. A. & BAJWA, T. M. 2023. Barriers to the adoption of social welfare measures in the electricity tariff structure of developing countries: A case of Pakistan. Energy Policy, 179, 113648. DOI: https://doi.org/10.1016/j.enpol.2023.113648
  25. KHALID, S., RAZA, A., YOUSAF, M. Z., MIRSAEIDI, S. & ZHICHU, C. 2023. Recent Advances and Future Perspectives of HVDC Development in Pakistan: A Comprehensive Review. IEEE Access. DOI: https://doi.org/10.1109/ACCESS.2023.3283431
  26. KHAN, I., HOU, F. & LE, H. P. 2021. The impact of natural resources, energy consumption, and population growth on environmental quality: Fresh evidence from the United States of America. Science of the Total Environment, 754, 142222. DOI: https://doi.org/10.1016/j.scitotenv.2020.142222
  27. KHAN, M. I., KHAN, I. A. & CHANG, Y.-C. 2020. An overview of global renewable energy trends and current practices in Pakistan—A perspective of policy implications. Journal of Renewable and Sustainable Energy, 12. DOI: https://doi.org/10.1063/5.0005906
  28. KHAN, S. R. 2022. Economic successes in South Asia: a story of partnerships, Routledge. DOI: https://doi.org/10.4324/9781003176411
  29. KUMAR, R., BIRN, A.-E., BHUYAN, R. & WONG, J. P.-H. 2022a. Universal health coverage and public-private arrangements within Sri Lanka's mixed health system: Perspectives from women seeking healthcare. Social Science & Medicine, 296, 114777. DOI: https://doi.org/10.1016/j.socscimed.2022.114777
  30. KUMAR, R., KUMAR, A. & SAIKIA, P. 2022b. Deforestation and forests degradation impacts on the environment. Environmental Degradation: Challenges and Strategies for Mitigation. Springer. DOI: https://doi.org/10.1007/978-3-030-95542-7_2
  31. MAHMOOD, A. 2023. Revisiting Pakistan's Energy Crisis and CPEC Power Projects: Prospects, Challenges, and Remedies for Energy, Environmental, and Debt Sustainability. Journal of Professional Research in Social Sciences, 10, 1-23.
  32. MATHES, G. H., VAN DIJK, J., KIESSLING, W. & STEINBAUER, M. J. 2021. Extinction risk controlled by interaction of long-term and short-term climate change. Nature Ecology & Evolution, 5, 304-310. DOI: https://doi.org/10.1038/s41559-020-01377-w
  33. MITRA, M., SINGHA, N. R. & CHATTOPADHYAY, P. K. 2023. Review on renewable energy potential and capacities of South Asian countries influencing sustainable environment: A comparative assessment. Sustainable Energy Technologies and Assessments, 57, 103295. DOI: https://doi.org/10.1016/j.seta.2023.103295
  34. MURSHED, M. 2020. Are Trade Liberalization policies aligned with Renewable Energy Transition in low and middle income countries? An Instrumental Variable approach. Renewable Energy, 151, 1110-1123. DOI: https://doi.org/10.1016/j.renene.2019.11.106
  35. NAVEED, S., FAROOQI, M. R. & JADOON, M. Z. I. 2022. Energy Sector Reforms in Pakistan: Trends and Challenges. Public Sector Reforms in Pakistan: Hierarchies, Markets and Networks, 111-132. DOI: https://doi.org/10.1007/978-3-030-96825-0_5
  36. PANAGARIYA, A. 2022. The Indian economy at 75. The Round Table, 111, 275-290. DOI: https://doi.org/10.1080/00358533.2022.2082682
  37. PARK-POAPS, H., BARI, M. S. & SARKER, Z. W. 2021. Bangladeshi clothing manufacturers' technology adoption in the global free trade environment. Journal of Fashion Marketing and Management: An International Journal, 25, 354-370. DOI: https://doi.org/10.1108/JFMM-06-2020-0119
  38. QAZI, U., IQBAL, S., ZAHEER, H. & UR, R. T. 2020. Prepaid metering: A way forward for sustainable power sector in Pakistan. Energy Strategy Reviews, 31, 100546. DOI: https://doi.org/10.1016/j.esr.2020.100546
  39. RAHMAN, M. M. 2023. Textile Export Nexus in Bangladesh: An Econometric Exploration. DOI: https://doi.org/10.20944/preprints202309.1884.v1
  40. RASHıD, A. 2020. Understanding the prospective role of renewable energy in Pakistan's energy security strategy under vision 2025: A qualitative inquiry.
  41. RECKLING, M., AHRENDS, H., CHEN, T.-W., EUGSTER, W., HADASCH, S., KNAPP, S., LAIDIG, F., LINSTÄDTER, A., MACHOLDT, J. & PIEPHO, H.-P. 2021. Methods of yield stability analysis in long-term field experiments. A review. Agronomy for Sustainable Development, 41, 1-28. DOI: https://doi.org/10.1007/s13593-021-00681-4
  42. RICHARDS, M., KARKY, B. S., BHATTARAI, N., BASNETT, T. & WINDHORST, K. 2022. The drivers of deforestation and forest degradation in the Himalayan region: a literature review.
  43. SALAM, R. A., AMBER, K. P., RATYAL, N. I., ALAM, M., AKRAM, N., GOMEZ MUNOZ, C. Q. & GARCIA MARQUEZ, F. P. 2020. An overview on energy and development of energy integration in major South Asian countries: the building sector. Energies, 13, 5776. DOI: https://doi.org/10.3390/en13215776
  44. SHAH, M. I. 2021. Investigating the role of regional economic integration on growth: Fresh insights from South Asia. Global Journal of Emerging Market Economies, 13, 35-57. DOI: https://doi.org/10.1177/0974910120974800
  45. STRIELKOWSKI, W., CIVÍN, L., TARKHANOVA, E., TVARONAVIČIENĖ, M. & PETRENKO, Y. 2021. Renewable energy in the sustainable development of electrical power sector: A review. Energies, 14, 8240. DOI: https://doi.org/10.3390/en14248240
  46. WANG, S., ZAFAR, M. W., VASBIEVA, D. G. & YURTKURAN, S. 2024. Economic growth, nuclear energy, renewable energy, and environmental quality: Investigating the environmental Kuznets curve and load capacity curve hypothesis. Gondwana Research, 129, 490-504. DOI: https://doi.org/10.1016/j.gr.2023.06.009
  47. XU, D., ABBASI, K. R., HUSSAIN, K., ALBAKER, A., ALMULHIM, A. I. & ALVARADO, R. 2023. Analyzing the factors contribute to achieving sustainable development goals in Pakistan: A novel policy framework. Energy Strategy Reviews, 45, 101050. DOI: https://doi.org/10.1016/j.esr.2022.101050