DOI: https://doi.org/10.61435/ijred.2026.62444

Economic growth and renewable energy consumption in Asia: Does good governance mitigate the trade-off?

School of Government (SOG), College of Economics, Law and Government (CELG), University of Economics Ho Chi Minh City (UEH), Viet Nam

Received: 3 Mar 2026; Published: 1 Jul 2026.
Editor(s): H Hadiyanto
Open Access Copyright (c) 2025 The Author(s). Published by Centre of Biomass and Renewable Energy (CBIORE)
Creative Commons License This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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Abstract
The relationship between economic growth and renewable energy consumption remains ambiguous under environmental Kuznets curve framework. While optimistic perspectives suggest that high income levels drive the renewable energy consumption, evidence from emerging economies also indicates that economic growth reinforces fossil fuel dependence during early stage of development. This study examines the potential economic growth and renewable energy consumption trade-off in 31 Asian economies over the period 1996-2023 and investigates whether governance quality moderates this relationship. Applying fixed-effects panel estimation, with country-clustered standard errors, governance quality is constructed as a multi-dimensional index based on principal component analysis (PCA).The findings suggest that economic growth is associated with the decline in the share of renewable energy consumption, implying the presence of growth-induced fossil-lock in dynamics. However, governance quality significantly moderates this nexus by mitigating the adverse impact of economic growth on renewable energy adoption. These results imply that governance quality plays a crucial role in redirecting growth trajectories toward cleaner energy structures. This study contributes to the literature by reconceptualizing governance as an intitutional buffer that moderates structural trade-offs in the energy transition process across heterogeneous Asian countries.
Keywords: Economic growth; Renewable energy consumption; Good governance; Moderating role; Asian economies, Fixed-effect panel estimation
Funding: Vietnameses Ministry of Education and Training

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Section: Sustainable Renewable and Energy Efficiency
Language : EN
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