What Drives Renewable Energy Consumption in Asia

Abstract

In more recent years Asia has had the highest level of investment in renewables and the highest level of electricity generation from renewable sources. This paper analyzes the determinants of renewable energy consumption in Asia and the Pacific from 1996 to 2018. It explores the major challenges this region has faced in moving towards a more environmentally friendly generation and use of energy. We find that the renewable electricity output, GDP per capita, merchandise trade, the value added of the manufacturing sector and the income share held by the poorest population boost renewable electricity consumption. On the other hand, energy use per capita, access to electricity, energy imports, broad FDI, population growth and the income share held by the richest population lower consumption of electricity from renewable sources. Trade openness and being an island do not seem to have a statistically significant impact in our sample over the observed period.