| dc.description.abstract | One of the most difficult problems of the 21st century is the global commitment to fight climate change and make sure everyone has access to clean energy. This is what the Sustainable Development Goals (SDGs) are all about. Two of the most important goals are SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action). While technological advancements in renewable energy are essential, there is an urgent need for a more profound comprehension of the fundamental socio-economic and governance factors that either promote or obstruct the energy transition. This study empirically examines the dynamic and long-term effects of three fundamental components of a nation's enabling environment: Institutional Quality (IQ), Information and Communication Technology (ICT), and Economic Freedom (EF). The research analyzes their impact on two principal dependent variables: Renewable Energy Consumption (REC) and Carbon Emissions (CO2). The primary hypothesis asserts that these elements are not distinct, autonomous influences but rather form a synergistic triad, wherein advancements in one domain enhance the efficacy of the others, thereby establishing a virtuous cycle crucial for cultivating a sustainable energy future.
This study utilizes a stringent, sequential econometric methodology on an extensive panel dataset. The analysis commences by validating substantial cross-sectional dependency (CSD), thereby requiring the application of second-generation methodologies. Panel unit root tests show that all of the variables are integrated of order one, I(1). After that, advanced cointegration tests that are strong against CSD confirm that there is a stable long-run equilibrium. Dynamic panel methods are then used to estimate the long-run and short-run coefficients for both the Renewable Energy Consumption and CO2 emissions models. These methods deal with problems of endogeneity and cross-sectional dependence, which makes the results more reliable. The empirical findings present a profound and persuasive narrative. Over time, Institutional Quality, ICT, and Economic Freedom have all been shown to be important factors in both increasing the use of renewable energy and lowering carbon emissions. For the SDG 7 model, Economic Freedom is a very strong driver. A 1% increase in Economic Freedom leads to a 0.106% increase in REC. This shows how important free and competitive markets are for encouraging new ideas and lowering the cost of renewable energy. IQ and ICT also have important positive effects, raising REC by 0.067% and 0.086% for every 1% improvement. This shows that a stable governance environment and advanced technological infrastructure are necessary for progress. The results for the SDG 13 model are just as important. A 1% increase in ICT and Economic Freedom leads to long-term reductions of 0.158% and 0.150% in CO2 emissions, respectively. This shows that digitalization and market-based efficiencies are strong forces for decarbonizing the whole economy, not just the energy sector. On the other hand, the analysis consistently shows that a higher reliance on Natural Resource Rents makes it much harder to use renewables and at the same time raises emissions. This gives strong evidence for the "resource curse" and "carbon lock-in" theories in the context of the modern energy transition. The Error Correction Term (ECT) is also negative and very significant in both models (about -0.12). This confirms that there is a stable long-run relationship and shows that the speed of adjustment back to equilibrium is about 12% per year after any short-run shock.
This study enhances the literature by transcending single-factor analyses to comprehensively examine the synergistic and evolving influence of institutional, technological, and economic drivers on sustainability outcomes. It gives a more detailed picture of the long-term structural changes needed for a successful energy transition. The paper ends with a list of policy suggestions that are all related to each other and are meant to create an environment where sustainable energy systems can thrive. These include: (1) promoting green investment by reducing financial risk and creating markets for green bonds; (2) putting in place effective carbon pricing systems that take social equity into account; and (3) making basic changes to improve the quality of institutions, take advantage of the transformative power of ICT, and increase economic freedom, especially by getting rid of fossil fuel subsidies. This study offers substantial macro-level insights and reveals a significant direction for future research. It emphasizes the necessity to decompose the composite indices employed for Institutional Quality, ICT, and Economic Freedom to yield more detailed and implementable policy recommendations. This more detailed approach would help find the best policy tools to speed up the transition to cleaner energy. Ultimately, this thesis underscores that genuine advancement in climate and energy objectives necessitates not merely the adoption of new technologies, but also profound, enduring structural reforms that foster innovation, cultivate trust in institutions, and guarantee that the transition is both efficient and just for all stakeholders. | en_US |
