Green Energy, Institutional Quality and Environmental Quality in the Context of Sustainable Development
Abstract
Environmental pollution is becoming an urgent global issue. Countries are implementing various solutions and establishing legal frameworks and institutional policies to promote the use of green energy sources and thereby minimize the adverse environmental impact of economic growth, investment, and consumption. The goal of economies worldwide, including in Asia, is to implement policies that promote sustainable development while optimizing economic performance. The purpose of this study is to evaluate the impact of green energy consumption and institutional quality on environmental quality. Using data from 29 selected Asian countries over the period 1970–2021, the empirical results indicate that green energy consumption does not have a statistically significant impact on environmental quality across the full sample. Improvements in institutional quality can enhance environmental quality and accelerate progress toward carbon neutrality and net-zero emissions targets. The Climate Change Conferences (COPs) have helped raise global awareness of the dangers of climate change, fostering greater international cooperation to protect the planet and promote sustainable development. To capture the influence of international climate commitments, this study employs a dummy variable for the COP period (coded 0 before COP2 in 1996 and 1 thereafter). This variable is interacted with green energy consumption and institutional quality to examine whether the implementation of COP commitments moderates their effects on CO2 emissions. The empirical results show that greater political stability, particularly during the implementation of carbon emission reduction commitments, contributes to reducing greenhouse gas emissions and promoting sustainable development. The study also confirms that institutional quality plays a significant role in improving environmental quality and accelerating countries’ progress toward carbon neutrality and net-zero emission goals.