Publication Date: 2023/12/20
Abstract: The energy transition from fossil energy to renewable energy is an important discussion for each country along with the decreasing supply of fossil energy due to the increasing dependence on fossil energy demand. The shift towards decentralized renewable energy provides added value in encouraging the sustainability of economic development, especially in ASEAN. This study aims to analyze the impact of fossil and renewable energy consumption on the sustainability of economic development and measure the speed of adjustment of the energy transition. The analytical method used is the Panel Vector Error Correction Model (VECM Panel) covering 8 ASEAN countries. The results showed that renewable energy and natural resource rents variables were significant for economic growth, while fossil energy consumption was not statistically significant. The response of economic growth to fossil energy shows a small deviation compared to renewable energy with a positive and negative relationship pattern and reaches a steady state. This indicates the increasing commitment of countries in ASEAN 8 to the use of renewable energy in development. The increase in consumption of fossil energy is responded to by a deviation in the response of renewable energy that is greater than if there is an increase in consumption of renewable energy to fossil energy. It takes 6 periods of time horizon time to reach steady state conditions for the transition from fossil energy showing renewable energy.
Keywords: Energy Transition, Fossil Energy, Renewable Energy, Sustainable Economic Development.
DOI: https://doi.org/10.5281/zenodo.10409619
PDF: https://ijirst.demo4.arinfotech.co/assets/upload/files/IJISRT23DEC555.pdf
REFERENCES