The impact of governance and carbon emissions on renewable energy consumption in regional comprehensive economic partnership countries

The transition from fossil-fuel-based energy systems to renewable alternatives remains slow and uneven across many regions, raising questions about the institutional conditions that drive or constrain it. Most existing studies assume a linear relationship between governance quality and renewable energy consumption, and the regional comprehensive economic partnership (RCEP) countries, the world’s largest trade bloc, have received limited dedicated empirical attention despite their substantial heterogeneity in institutional quality and energy structures. This study addresses this gap by examining whether governance quality exerts a non-linear effect on renewable energy consumption across 15 RCEP countries from 2002 to 2022, alongside the roles of carbon dioxide and methane emissions, foreign direct investment, and trade openness. Panel cointegration tests confirm a stable long-run relationship among the variables, and the long-run effects are estimated using Pooled Ordinary Least Squares, Fully Modified Ordinary Least Squares, and Dynamic Ordinary Least Squares, with Canonical Cointegrating Regression and the Pooled Mean Group estimator applied as robustness checks. The central finding is a U-shaped non-linear relationship between governance quality and renewable energy consumption: renewable energy consumption initially declines as governance improves, but rises once governance quality surpasses a critical threshold. Carbon dioxide and methane emissions negatively affect renewable energy consumption, while foreign direct investment shows a positive but statistically insignificant effect, and trade openness exerts a significant negative impact. These findings suggest that, across the 15 RCEP countries, strengthening institutional quality beyond the identified governance threshold, alongside targeted emission-reduction policies, can substantially enhance renewable energy deployment in the region.