Emerging Asia’s move towards a net-zero path: The interplay of environmental threats, energy systems innovation, and vulnerability

Constantin Gurdgiev, Kazi Sohag and Md. Monirul Islam

Energy Economics, 2025, vol. 150, issue C

Abstract: Despite their reliance on fossil fuels, emerging Asia has committed to the Paris Agreement, aiming for environmental stewardship through renewable energy innovations outlined in their nationally determined contributions (NDCs). Motivated by this commitment, we investigate the impact of renewable energy innovation, investment, and energy systems vulnerability on GHG emissions (CO2, CH4, N2O), while accounting for the effect of economic growth and regulatory policies on these determinants of transition to net zero. Analysing data from 2000 to 2022 using a long-difference regression method, we find a counterintuitive response of GHG emissions to renewable energy innovation and investment. CO2 emissions exhibit an inverted U-shaped response to innovation and energy vulnerability. Overall, scale effects do not necessarily reduce emissions, and energy mix composition factors can lead to rebound effects. Thus, our evidence indicates that in the emerging Asia, current technology and institutional frameworks focus more on economic growth than on mitigating environmental impacts. Our structural breaks analysis confirms these findings. Therefore, we suggest the need for robust institutional mechanisms to promote clean energy innovation and address environmental challenges on the path to net-zero emissions.

Keywords: Net-zero emissions; Environmental quality; Economic growth; Regulatory quality; Long-difference regression; Emerging Asia (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:150:y:2025:i:c:s0140988325006917

DOI: 10.1016/j.eneco.2025.108864

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