The Dynamic Relationship between Carbon Emissions, Financial Development, and Renewable Energy: A Study of the N-5 Asian Countries

As a critical component of primary production and consumption activities worldwide, renewable energy is a necessary source of economic development and social prosperity. The main emphasis of the current research is to investigate how five Asian countries are leveraging financial resources and renewable energy to address carbon emissions and achieve Sustainable Development Goals. It explores the relationship between the environmental impacts of financial development and renewable energy under external moderation. To address this aim, a secondary quantitative research method was used, considering the period from 2010 to 2020. For data analysis, a cross-sectional dependence test, second-generation unit root test, co-integration, and CS-ARDL model were used. The research findings revealed that renewable energy induces a short-term influence on CO2 emissions. In contrast, renewable energy and financial development, when moderated by institutional quality and globalisation, have posed long-term influences on CO2 emissions. Our empirical research offers fresh insights to policymakers and governments, aiding in the development policies that safeguard environmental quality while simultaneously achieving sustainable economic objectives. This study suggests the significance of enacting adequate policies for endorsing the usage of renewable energy and the minimisation of CO2 emissions for sustainable development.