Sustainable Development of Renewable Energy Consumption in G7 and ASEAN-5 Countries: Panel Fixed-Effect Econometric Modelling

Abstract

Energy is the key driver of economic growth; however, the economic leadership position of G7 countries and the rising global manufacturing hub status of the ASEAN-5 countries have yet to achieve the Sustainable Development Goals. Thus, this paper aims to examine the effects of real GDP per capita, urban population, the number of individuals using the internet, carbon dioxide emissions, total trade and net foreign direct investment (FDI) inflows on the renewable energy consumption (REC) of G7 and ASEAN-5 countries from 1990 to 2021 yearly data. Using Studenmund’s and Gujarati and Porter’s procedures of the panel data model, the panel fixed-effect econometric modelling held the best outcome for both G7’s and ASEAN-5 countries’ REC models. Based on the findings, urban population highly and positively affects REC in G7 countries. However, there is also a positive and strong relationship between net FDI inflows and REC in ASEAN-5 countries. The empirical findings prove the importance of macroeconomic, socioeconomic and environmental variables for the outcomes of REC policies across both developed and developing countries.

Keywords

• sustainable development
• SDG7
• renewable energy consumption
• G7 and ASEAN-5 countries
• panel data analysis