The digital age in the SAARC region has been a mixed bag of opportunities and challenges in the transition towards renewable energy. Anchored with this understanding, this paper examines the impact of the digital economy on energy transition in major SAARC countries by using the Cross-Sectionally Augmented Distributed Lag (CS-ARDL) model and Jordan-Karavias-Sarafidis (JKS) 2021 panel causality test. The outcomes from the CS-ARDL model confirm that the digital economy is positively related to energy transition, while government interventions significantly improve this relationship. The JKS causality test outcomes further reveal a bidirectional causality between the digital economy and energy transition, the interaction term of digital economy*government intervention (digi*gov) and energy transition, and foreign direct investment (FDI) and energy transition. Further, economic growth, labour force and inflation have one-way causality with energy transition. Robust digital infrastructure and the right policies by the government will play an important role in spurring renewable energy. Policymakers must invest in digital infrastructure, aid favourable regulatory environments, and spur public-private partnerships that yield innovation for the energy sector.
Ganie et al. (Tue,) studied this question.