The role of urbanization in fossil fuel demand of developing Asian economies: understanding the moderating effect of renewable energy productivity

This study investigates the potential of sustainable urbanisation through the lens of renewable energy productivity, examining its ability to alleviate fossil fuel consumption amidst rising urbanisation. This study explores the influence of urbanisation, renewable energy productivity, regulatory quality, and human capital on fossil fuel consumption. This study has utilised a balanced panel dataset of 20 developing Asian countries from 1996 to 2020, employing a pooled mean group-autoregressive distributive lag (PMG-ARDL) and Driscoll-Kraay Standard Errors techniques to estimate the model. The results reveal that urbanisation and human capital are positively correlated with fossil fuel consumption due to rising energy demands from the concentrated population and their lifestyle. In contrast, renewable energy productivity and regulatory quality significantly reduce fossil fuel usage by encouraging efficient use of renewable energy and regulating sustainable policies. Furthermore, the interaction between urbanisation and renewable energy productivity specifically portrays a compelling force in diminishing fossil fuel use dependency, emphasising a pathway towards sustainable development goal 11 (SDG11). Policy implications propose in prioritising energy-efficient technologies and government intervention to boost sustainable growth in urban areas, along with emphasising the need for environmental education to reinforce public engagement in renewable energy use.