DOES RENEWABLE ENERGY CHANGE THE REMITTANCE–CARBON EMISSIONS NEXUS? EVIDENCE FROM SELECTED ASIAN ECONOMIES

Abstract

This study aims to examined the relationship between remittances and carbon emissions with moderating role of renewable energy in remittance-receiving selected Asian economies. Annually data taken from World Bank database, used for Bangladesh, Cambodia, India, Indonesia, Kyrgyz Republic, Nepal, Pakistan, Philippines and Sri Lanka for the period 2000-2021. The empirical design includes both country and year fixed effects and Driscoll–Kraay standard errors. However, several key variables were found non-stationary at level using the unit root tests and mixed evidence of panel cointegration, for which reason the final model was estimated in first difference form. The results show a strong negative association between changes in renewable-energy consumption and changes in per-capita CO2 emissions. The interaction remains negative across specifications but becomes statistically weaker after adding FDI and urbanization. The remittance association is statistically insignificant for a low share of renewable energy and negative and becomes statistically significant at a relatively high share of renewable energy. The conclusions offer only partial evidence that a cleaner energy system is associated with lower carbon intensity of economic activities linked to remittance inflows.