Does Adaptation of Renewable Energy and Use of Service Industry Growth Diminution CO2 Emissions: Evidence of ASEAN Economies

Abstract

According to recent years, ASEAN economies mainly focused on the development of renewable energy, which contributes to leading role of changing the economic structure towards service sector industry. So, most of the studies ignored the effect of heterogeneity and cross-sectional independence. It caused the biased and spurious results. Hence this study used the panel of 9 ASEAN economies of the time from 2000 to 2018, and Arelleno Bond Generalized Method of Moments (GMM) is used to examine the impact of renewable energy and the development of the service sector on Carbon emissions in ASEAN economies. Moreover, GMM overcomes the problem of cross-sectional dependence and heterogeneity so that the results will be unbiased and consistent. Results showed that an increase in the level of renewable energy usage and economic development leads to decrease in the level of CO2 emissions. Furthermore, development in the service sector industry and urbanization boost the level of emissions of carbon dioxide. So, the policymakers need a revolution in the renewable energy sector, which increased economic growth and total energy production and keep the environment safe, healthy and clean.