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From Subsidies to Sustainability: Unveiling the Economic Forces Shaping Renewable Energy Adoption in Emerging Economies

In: Proceedings of the 9th International Conference on Accounting, Management, and Economics 2024 (ICAME 2024)

Author

Listed:
  • Nur Cholis

    (Hasanuddin University)

Abstract

This study investigates the combined impact of fossil fuel subsidies, foreign direct investment (FDI), and GDP per capita on renewable energy consumption in Southeast Asian countries, focusing on Indonesia, Vietnam, Malaysia, and Thailand. By employing panel data regression analysis from 2017 to 2022, the research explores how these economic variables shape the region’s transition towards renewable energy. The results reveal that fossil fuel subsidies significantly hinder renewable energy adoption, confirming that government support for fossil fuels creates market distortions that favor non-renewable energy sources. On the other hand, FDI and GDP per capita show a positive and significant relationship with renewable energy consumption, indicating that both foreign investments and economic growth are crucial drivers of the green energy transition. The findings suggest that reducing or eliminating fossil fuel subsidies, while attracting more foreign investments in renewable energy, will be key to accelerating the clean energy transition in Southeast Asia. Future research should explore the impacts of specific types of FDI and more targeted subsidy reforms to gain deeper insights into policy effectiveness.

Suggested Citation

  • Nur Cholis, 2025. "From Subsidies to Sustainability: Unveiling the Economic Forces Shaping Renewable Energy Adoption in Emerging Economies," Advances in Economics, Business and Management Research, in: Mursalim Nohong & Fitra Roman Cahaya & Phung Minh Tuan & Arifuddin Mannan & Anas Iswanto Anwar & Ria (ed.), Proceedings of the 9th International Conference on Accounting, Management, and Economics 2024 (ICAME 2024), pages 676-684, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-758-8_57
    DOI: 10.2991/978-94-6463-758-8_57
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