The Energy-Emission-Growth Nexus in ASEAN: A Heterogeneous Panel Analysis of Renewable Transition and Economic Outcomes

This study examines the relationships between renewable energy, fossil fuel consumption, CO2 emissions, and economic growth in ASEAN. To account for significant heterogeneity among member states, a panel data approach captures country-specific effects, offering a nuanced perspective on the energy transition’s economic implications. Analyzing data from Indonesia, Malaysia, Thailand, Singapore, the Philippines, and Vietnam (2000-2023), a panel regression model is estimated. Statistical tests confirm the Fixed Effects Model (FEM) as optimal, controlling for unobserved national characteristics. The findings reveal significant heterogeneity. Aggregate analysis shows renewable energy correlates more strongly with GDP per capita than fossil fuels, while CO2 emissions exhibit a negative relationship. Country-level analysis reveals critical divergences: Vietnam demonstrates a decoupling pathway with lower emissions alongside higher growth, whereas Indonesia and the Philippines show negative coefficients for renewables, suggesting cost-related barriers limit their economic benefits. By explicitly modelling heterogeneity, this study advances beyond homogeneous panel assumptions that mask critical disparities. The results provide tailored insights into diverse ASEAN energy-economic realities, highlighting the ineffectiveness of uniform transition strategies and underscoring the need for context-specific policies to synergize economic and environmental objectives.