Abstract:The role of foreign direct investment (FDI)

This study aimed to explore the determinants of renewable energy consumption in selected Association of Southeast Asian Nations (ASEAN) countries by emphasizing the significant role played by the quality of governance. This paper is classified according to the coverage of three dimensions approach (economic, environment, and governance) for sustainability. This study employed panel data analysis to examine the relationship between GDP, CO 2 emissions, foreign direct investment, trade openness, urbanization, and quality of governance on renewable energy consumption in selected ASEAN countries from 1990 to 2016. The results revealed that urbanisation has a significant positive impact on renewable energy based on FMOLS and DOLS analyses while the quality of governance has a significant positive impact on renewable energy based on pooled mean group analysis in the long run. However, GDP and trade openness have a significant negative impact on renewal energy. The elasticity analysis in the short run revealed that none of the factors applied in this study affected renewable energy consumption. Hence, several policies are recommended as an excellent approach to meet the energy demand of private investors and future generations.

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This study investigated the effects of energy consumption (ENY) based on fossil fuels and alternative energy with hydroelectricity as its proxy upon pollution, aside from ascertaining if the correlation between income and pollution determined the presence of Environmental Kuznets curve (EKC). In addition, the functions of foreign direct investment (FDI) inflows and trade openness (TO) were probed into so as to generate more precise outcomes of EKC hypothesis. Hence, in order to fulfil the objectives outlined in this study, the Bound estimation method was utilized to examine three developing nations of the Association of South East Asian Nation (ASEAN), which are Malaysia, Indonesia, and Thailand. The main finding of interest retrieved from this paper refers to the EKC hypothesis reflective of Malaysia and Thailand. It was discovered that hydroelectricity favourably lowered the release of carbon emissions in the case of Malaysia, while it insignificantly influenced environmental degradation for Indonesia and Thailand. On the other hand, as anticipated, per capita energy use displayed a significant long-run effect in raising the levels of carbon emission in Indonesia and Thailand. Meanwhile, the FDI inflows seemed to improve the environmental quality only in Malaysia, while deepening in TO among ASEAN-3 nations appeared to successfully minimize issues related to environmental degradation in these countries.

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