FOSSIL FUEL PRICE, CARBON DIOXIDE EMISSION, AND RENEWABLE ENERGY CAPACITY: EVIDENCE FROM ASIAN DEVELOPING COUNTRIES

  • Karren Lee-Hwei Khaw Department of Finance and Banking, Faculty of Business and Accountancy University of Malaya
  • Toh Jia Ni Department of Finance and Banking, Faculty of Business and Accountancy University of Malaya

Abstract

This paper examined the impact of fossil fuel price and carbon dioxide (CO2) emission on renewable energy, using a sample of 14 Asian developing countries from the years 2000 to 2018. Fossil fuel prices, mainly those of crude oil and coal, are positively related to renewable energy capacity. CO2 emission is also a positive driver, indicating the significance of environmental concern. The results were consistent for both the upper-middle-income and lower-middle-income countries. Between fossil fuels and CO2 emission, the positive impact of CO2 emission outweighed that of fossil fuels. From a policy perspective, this paper concurs the need to shift huge subsidies away from fossil fuels to renewable energy and to enforce a heavy tax on CO2 emission for a sustainable environment.

Published
2021-01-30
How to Cite
KHAW, Karren Lee-Hwei; NI, Toh Jia. FOSSIL FUEL PRICE, CARBON DIOXIDE EMISSION, AND RENEWABLE ENERGY CAPACITY: EVIDENCE FROM ASIAN DEVELOPING COUNTRIES. International Journal of Banking and Finance, [S.l.], v. 16, n. 1, p. 79-96, jan. 2021. ISSN 1675-722X. Available at: <http://e-journal.uum.edu.my/index.php/ijbf/article/view/ijbf2021.16.1.5>. Date accessed: 15 apr. 2021. doi: https://doi.org/10.32890/ijbf2021.16.1.5.