The troika of energy consumption, economic growth, and CO2 emission: Quantile regression evidences for five Asian economies

This study examined the quadratic role of renewable energy and economic growth on environment quality in Asia's five most populous countries: China, India, Indonesia, Pakistan, and Bangladesh. Previous literature has scarcely addressed these economies and ignores the quadratic role of GDP per capita (GDPPC) and renewable energy (REN) together in a single study. Therefore, using STIRPAT model, we first added the quadratic term of GDPPC and then REN. In both cases, a quantile regression technique is utilised to identify the inclusive relationship between CO₂ emissions and determining factors, considering different quantiles (0.25, 0.50, 0.75, 0.90, and 0.95) of CO₂ emissions. The findings show that during the annual sample period of 1983–2019, urbanisation, GDPPC, non-renewable energy, and REN all have an impact on CO₂ emissions. Urbanisation and REN have nominal effects, with a 1% change in these variables leading to a 0.19% and 0.05% change in CO₂ emissions, respectively. Non-renewable energy and GDPPC are found to be main sources of CO₂ emissions in the region. GDPPC is positively associated with CO₂ emissions across all quantiles, but higher quantiles show a stronger correlation (i.e., GDPPC coefficients vary from 0.26 to 0.66). In addition, the results also revealed that the square term of GDPPC and REN significantly reduces CO₂ emissions. This implies that our results support the environmental Kuznets curve (EKC) hypothesis; an inverted U-shaped is established for both GDPPC and REN. These results encourage policy makers to adopt renewable energy that is both growth and environment friendly.