Financial Development And Energy Consumption In Environmental Sustainability: New Insights From ASEAN Countries

Abstract

This study intricately explores the tripartite relationship between financial development, energy consumption, and carbon emissions within the ASEAN region, focusing on the period from 1995 to 2020 and encompassing nine countries: Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. Employing diverse models including Fixed Effects (FE), Random Effects (RE), Arellano-Bover/Blundell-Bond GMM, and 50th Quantile, my investigation yields nuanced insights. Results from FE, RE, and Quantile models consistently reveal a positive correlation between financial development and increased carbon emissions, coupled with heightened energy consumption. In contrast, the Arellano-Bover/BlundellBond model suggests no statistically significant impact. The implication underscores the imperative for ASEAN nations to prioritize investments in clean technologies, enhance energy efficiency, and enact robust environmental policies to foster sustainable development and alleviate adverse environmental consequences