How Does the Endogeneity of Energy Financing, Carbon Emissions, and Energy Transition Affect the Upper-Middle- Income Countries in ASEAN?

Kasman Karimi (), Anggi Putri Kurniadi (), Nasfi Nasfi (), Novia Indriani (), Helmawati Helmawati (), Sumiati Sumiati (), Mai Yuliza (), Okfi Resti () and Suhelmi Helia ()
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Kasman Karimi: Faculty of Economic Business, Universitas Bung Hatta, Padang, Indonesia,
Anggi Putri Kurniadi: Research Center of Macroeconomics and Finance, Badan Riset dan Inovasi Nasional, Indonesia,
Nasfi Nasfi: Sekolah Tinggi Ekonomi Syariah Manna Wa Salwa, Tanah Datar, West Sumatra, Indonesia,
Novia Indriani: Faculty of Islamic Economics and Business, Universitas Islam Negeri Imam Bonjol Padang, Indonesia,
Helmawati Helmawati: Faculty of Economic Business, Universitas Bung Hatta, Padang, Indonesia,
Sumiati Sumiati: Sekolah Tinggi Ilmu Ekonomi KBP Padang, Sumatera Barat, Indonesia,
Mai Yuliza: Institut Teknologi dan Ilmu Sosial Khatulistiwa, Indonesia.
Okfi Resti: Sekolah Tinggi Ekonomi Syariah Manna Wa Salwa, Tanah Datar, West Sumatra, Indonesia,
Suhelmi Helia: Sekolah Tinggi Ilmu Ekonomi KBP Padang, Sumatera Barat, Indonesia,

International Journal of Energy Economics and Policy, 2025, vol. 15, issue 2, 746-755

Abstract: This study examines the endogeneity between energy financing, carbon emissions, and energy transition in Indonesia, Malaysia, and Thailand as upper-middle-income countries in ASEAN. Using data from 2000 to 2023, it analyzes the interactions among these three variables through a Vector Autoregression (VAR) approach. The study plays an essential role in highlighting the complex relationships among these variables, which often impact both economic dynamics and environmental sustainability. The findings show that no causal relationships exist between the variables. However, there is a one-way effect, where carbon emissions and energy intensity significantly influence energy financing, and energy intensity also has a significant impact on carbon emissions. These findings suggest that, despite the absence of causal relationships, increases in energy intensity and carbon emissions may drive higher energy financing. The policy implications underscore the importance of government roles in upper-middle-income ASEAN countries to enhance incentives for renewable energy investment, promoting energy intensity to help curb carbon emissions. Additionally, governments need to allocate more energy financing toward clean energy projects that can reduce the accumulation of carbon emissions. Such policies are expected to foster a more sustainable energy transition and contribute to lowering carbon emissions in ASEAN's upper-middle-income countries.

Keywords: Carbon Emissions; Energy Financing; Energy Transition; Vector Autoregression (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:v:15:y:2025:i:2:id:18085

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DOI: 10.32479/ijeep.18085

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