Do renewable energy sources perfectly displace non-renewable energy sources? Evidence from Asia-Pacific economies.

The existing scholarly discourse surrounding the energy transition has long operated on the assumption of perfect displacement of non-renewable energy. However, an evolving set of studies highlights an intricate web of inefficiencies and complexities that prevent the perfect displacement of fossil fuel energy with renewable energy production. Since this could carry serious implications for the environmental targets of several economies, it is crucial to accurately and continuously measure the actual extent of fossil fuel displacement. Within this framework, this study empirically investigates the extent of non-renewable energy displacement by renewable energy for a balanced panel of seven Asia-Pacific (APAC) countries between 1989 and 2015. The outcome function also controls for globalisation, real GDP per capita, and crude oil prices. After implementing the necessary diagnostics, the panel cointegration establishes a significant long-run relationship among the selected variables. The PMG-ARDL estimation indicates that renewable energy production and globalisation significantly reduce the fossil fuel energy production, whereas real GDP per capita and crude oil prices induce it positively. However, the coefficient of renewable energy production is only - 0.39, indicating that more than 2.5 units of renewable electricity are necessary to displace a unit of non-renewable energy. As such, this study concludes that the current energy transition in Asia-Pacific region is not perfect. These results are robust to the usage of the FGLS estimation technique. The study suggests the adoption of a new energy transition that allows greater displacement of fossil fuel energy as well as gradual reduction in overall energy use.

Is skewed income distribution good for environmental quality? A comparative analysis among selected BRICS countries.

A large number of studies have examined the linkage between income inequality and environmental quality at the individual country levels. This study attempts to examine the linkage between the two factors for the individual BRICS economies from a comparative perspective, which is scarce in the literature. It examines the selected countries (Brazil, India, China and South Africa) by endogenising the patterns of primary energy consumption (coal use and petroleum use), total primary energy consumption, economic growth, and urbanisation as key determining factors in CO2 emission function. The long-run results based on ARDL bounds testing revealed that income inequality leads to increase in CO2 emissions for Brazil, India and China, while the same factor leads to reduction in CO2 emissions for South Africa. However, it observes that while coal use increases CO2 emissions for India, China and South Africa, it has no effect for Brazil. In contrast, the use of petroleum products contributes to CO2 emissions in Brazil, while the use of the same surprisingly results in reduction of carbon emissions in South Africa, India and China. The findings suggest that given the significance of income inequality in environmental pollution, the policy makers in these emerging economies have to take into consideration the role of income inequality, while designing the energy policy to achieve environmental sustainability.