Decoding the nexus of economic growth,CO 2 emissions,and energy use: Panel evidence from Asia-Pacific countries

Abstract

Decoupling economic growth from environmental degradation is a primary challenge for the Asia-Pacific. This study examines long-run dynamic associations between renewable energy (RE), non-renewable energy (NRE), economic growth, and $C O_{2}$ emissions across 32 Asia-Pacific economies (1990–2023). Employing the PMG-ARDL estimator and panel causality tests, the research provides a granular analysis of income-based heterogeneity. The results are consistent with an inverted U-shaped Environmental Kuznets Curve (EKC) association, with estimated income-specific mathematical inflection points at log-income levels of 29.50 for the High-Income group and 29.30 for the Middle-and-Low-Income group. NRE remains a dominant long-run correlate of growth, while also being associated with higher environmental costs. Conversely, RE and Foreign Direct Investment (FDI) in advanced technological hubs are negatively associated with emissions, providing evidence of patterns consistent with the “Technique Stage” and “Pollution Halo” hypotheses. Sub-group analysis indicates regional divergence: estimates for advanced economies are consistent with associations expected under a possible movement toward decoupling, whereas industrializing economies show associations consistent with scale-driven energy demand and “Pollution Haven” risks. These findings should be interpreted as evidence of long-run dynamic associations rather than definitive causal mechanisms. Results suggest potential pathways for differentiated strategies and infrastructure transitions toward regional decarbonization.

Keywords

renewable energy non-renewable energy economic growth Environmental Kuznets Curve (EKC)Asia-Pacific C23 O10 Q42 Q43

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