Exploring the Effect of Technological Diffusion on Energy Transition: A Path to Low Carbon Economy and Sustainability

Abstract

Transition towards renewable and low-carbon energy is now the core objective of energy policy of all countries striving to achieve sustainable development goals. This necessitates the understanding of accelerating factors of energy transition. Therefore, this study investigated the influence of technological diffusion on energy transition using data from South Asia and G20 countries from 2000 to 2022. The data estimation starts with cross-sectional dependence and unit root test, and both these tests suggest the use of the feasible generalized least square method as the primary estimation technique. The feasible generalized least square findings show that technological diffusion positively and significantly affects energy transition in South Asia and G20 countries. The results also demonstrate that the effect of technological diffusion on energy transition is stronger in G20 countries than in South Asia. Findings further show that globalization and governance accelerate energy transition, but the effect of governance on energy transition in South Asia is statistically insignificant. In contrast, Income per capita has an inverted U-shaped relationship with energy transition in both countries. Finally, this study makes some recommendations for further enhancing energy transition in light of the findings of this study.