Factors Affecting the Environmental Quality: The Role of Renewable Energy Consumption and the Financial Market

Abstract

The objective of the study is to evaluate the effect of renewable energy and factors such as financial development, foreign direct investment, population size and urbanization rate on CO2 emissions in six typical Southeast Asian country between 2000 and 2020. Using quantitative analysis, the study results confirm that the use of renewable energy has the potential to improve environmental quality due to its ability to reduce energy CO2 emissions. However, increasing urbanization rate has a negative impact on environmental quality because urbanization is associated with labor mobility and increased CO2 emissions. There is no evidence of between population size, financial development, foreign direct investment and CO2 emissions.