Energy transition in Southeast Asian countries: is there a role for governance at country level?

1 School of Finance and Accounting, Fuzhou University

of International Studies and Trade, Fuzhou, China

2 Faculty of International Tourism and Management, City

University of Macau, Macau, China

Effective governance is crucial for building environmental policies in order to discourage non-renewable energy use and replace it by renewable resources. Given the significant proportion of fossil fuels in the existing energy mix of ASEAN countries, the transition to renewable energy is critical for emissions to be reduced in this region. As a pioneering one, the present study focuses on the role of governance indicators and economic growth in energy transition in Southeast Asian (ASEAN) countries over the period 2000–2020. For the purpose of empirical investigation, the study applies the recently introduced methods of movement quantile regression (MMQR) with FE-OLS, DOLS, and FMOLS estimation techniques. The findings of indicate that economic growth significantly promotes energy transition in ASEAN countries. Among the governance indicators, political stability, rule of law, and regulatory quality significantly and positively affect energy transition, whereas government effectiveness and control of corruption play negative roles in energy transition. Voice and accountability have no significant effect on energy transition. Political stability and rule of law play significant roles in energy transition at all quantiles, but political stability has a significant effect on energy transition only at higher quantiles (0.60–0.90). Similarly, government effectiveness and control of corruption negatively impact energy transition at medium to higher (0.50–0.90) and at higher quantiles (0.80–0.90), respectively. Policies are recommended on the basis of the findings.