Renewable Energy Transition and Inclusive Green Growth in EMDEs : Evidence From a CS ‐ ARDL Approach

The dual challenges of climate change and social exclusion present serious barriers to sustainable development in emerging markets and developing economies (EMDEs). Inclusive green growth (IGG) is critical for these nations as it helps sustain economic growth while managing environmental and social costs. Although the literature highlights the role of renewable energy in reducing environmental harm, it offers limited analysis of its impact on IGG. Using data from 78 EMDEs from 1992 to 2021, we construct indices for IGG (via data envelopment analysis) and renewable energy transition (via principal component analysis) to examine their relationship. Applying the CS‐ARDL model, we find that a 1% rise in renewable energy transition increases IGG by 1.495% in the long run and 2.078% in the short run. This effect operates through improvements in energy efficiency, environmental quality and broader access to clean energy. It is also observed that financial development, government spending and internet access enhance IGG, while urbanisation and economic globalisation have adverse effects. The results suggest that policies supporting renewable energy transition can foster more inclusive and low‐carbon growth pathways across EMDEs.