Document Type : Research Article

Authors

Departement of Economics Development, Faculty of Economics, Universitas Sriwijaya

10.30501/jree.2024.407959.1636

Abstract

Renewable energy plays an essential role in diminishing carbon emissions, which can be harmful to climate change and pose a threat to our lives. Therefore, this study has the main objective of examining the nexus of renewable energy consumption, trade openness, and climate change. The data used is panel data for emerging Asian countries in the period of 2010-2021. The Granger Causality Test and The Vector Error Autoregressive Model were employed to investigate the relationship among variables. The findings indicate a unidirectional relationship between renewable energy and inflation, and renewable energy consumption and CO2 emissions. The findings suggest carbon dioxide emissions can drive renewable energy consumption. It provides a signal that low carbon development benefits from globalization and that globalization stimulates renewable energy growth and helps to cope the climate change. The research results also confirm that there is a bidirectional relationship between trade openness and inflation. The impulse response analysis supports the notion that there is a robust negative correlation between a country’s trade openness and its inflation rate, both in the short and long term.

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