Role of research and development in green economic growth through renewable energy development: Empirical evidence from South Asia

South Asia harbors about 2 billion of the global population, making the region more sensitive to environmental issues-related effects. For instance, due to the natural catastrophes caused by environmental issues, the region has suffered a loss totaling about $149 billion between 2002 and 2018. Nevertheless, the energy demand has significantly increased owing to economic expansion. However, this need has not been adequately met despite the region’s abundant supply of renewable energy.

The rapid growth in the global population, coupled with environmental depletion of natural resources, is a major concern for the global economy. Several contemporary socio-economic issues like poverty, increased urbanization, inadequate access to clean water and sluggish socio-economic development have been linked to environmental deterioration. Like other countries, South Asian nations are also dealing with these problems. For instance, rapid increase in the urban population in the last decades has put tremendous strains on the available natural resources, leading to environmental issues.

Green economic growth has been hailed as an effective strategy for addressing environmental issues. It can promote environmental conservation while mitigating some negative impacts of environmental degradation. While the main objective of green economy is to reduce carbon emissions, this has remained far from reality despite the consistent promises from the global community. Global warming and climate change continue to wreak havoc on nearly all aspects of socio-economic development. While South Asia nations are seeing increased green economic growth, more efforts are still needed.

Compared to the effects of globalization, financing research and development (R&D) in environment protection and renewable energy could significantly benefit the creation of environmental sustainability and provide a stimulus for green economic growth. Although numerous studies have linked growing affluence to environmental degradation, it is worth noting that environmental protection would contribute to innovation, green technologies, energy efficiency and beneficial environmental regulations. All these can be achieved through green financing, a vital driver of industrial structural change and green economic development.

Herein, Dr. Wei Fang from Guangdong Academy of Agricultural Sciences, Dr. Zhen Liu from Nanjing Normal University and Dr. Ahmad Romadhoni Putra from Universitas Gadjah Mada studied the impact of R&D, renewable energy and industrialization on green economic growth. Specifically, the study focused on the South Asian region from 2008 to 2020. A two-step ordinary least square was adopted to address the endogeneity of this complex connection. Furthermore, the initiative’s impact on carbon emissions and energy usage was assessed using the mediating effect analysis approach. Their work is currently published in the journal, Renewable Energy.

The authors showed that upgrading the development of industrial structures and R&D initiatives is instrumental in promoting green economic growth, including reducing carbon emissions and stimulating green economic recoveries. Based on the findings, the region saved approximately 33.4% of its energy and reported a 35.2% reduction in carbon emissions. The potential benefits of the policy’s affecting framework were illustrated using the mediation impact findings. Technology spillover exhibited the most responsibility to minimizing tiers of carbon emissions, coupled with improvements in the changes in the industrial structure. The authors identified three key ways South Asian nations could use to influence the global economy: upgrading the industrial structures, fostering green international commerce and boosting technological growth.

In summary, the new study investigated the role of R&D in stimulating green economic growth and industrial structural improvements. The findings offered more knowledge and insights into the reality of the global advances toward green economic development and which could help conserve the environment, reduce the emissions of greenhouse gases, and ensure efficient energy consumption. In a statement to Advances in Engineering, Dr. Wei Fang said their findings would contribute to the green and sustainable development of the global economy.