The energy – environment – growth nexus has been examined for the Southeast Asian countries mainly using time series data. Few studies have been conducted using panel data. The roles of renewable energy and population have largely been ignored in previous studies. As such, this study is conducted to investigate a dynamic causal link between renewable energy usage, population, carbon emissions, and economic growth. Unlike previous panel data studies for the ASEAN region, a relatively new and advanced panel vector autoregressive model and the Granger non-causality test for heterogeneous panels are utilized using a sample of seven ASEAN countries for almost three decades since 1990.
Key findings from this paper are as follows. First, energy consumption does lead to CO2 emissions - a 1 per cent increase in energy consumption will lead to an increase of about 0.34 per cent CO2 emissions which is lower than previously reported. Second, renewable energy usage explains a substantial proportion of the change in economic growth and energy consumption. Renewable energy also responds to population. Third, a bidirectional Granger causality between renewable energy, carbon emissions and population.
We argue that moderating population growth and extending renewable energy usage are important to achieve sustainable economic development in the ASEAN region.