Sustainability transitions in South and Southeast Asia: The interplay of environmental, economic, and technological drivers

This study investigates the environmental, economic, and technological determinants of sustainability in ASEAN and SAARC using panel data techniques, including FGLS, PCSE, Fixed-Effect OLS, and two-step System-GMM, alongside quantile regression. Sustainability is assessed through two complementary indicators: renewable energy consumption (REC), capturing energy transition, and adjusted net savings excluding emission damage (ANS), reflecting long-run resource-based sustainability. The inclusion of dynamic GMM estimation allows us to address potential endogeneity and unobserved heterogeneity. The findings reveal pronounced regional asymmetries. In ASEAN, energy use and CO₂ emissions significantly reduce REC, confirming fossil lock-in, although energy demand stimulates renewables at higher quantiles under expansionary conditions. In SAARC, emissions show weak or positive links with REC, while forest resources strongly promote renewable use, indicating biomass dependence. For ANS, emissions, energy use, GDP, and digital penetration exert positive effects across both regions, suggesting that industrialization-driven accumulation may dominate sustainability outcomes in the short to medium term. Forest resources exhibit contrasting effects—reducing ANS in ASEAN but enhancing it in SAARC—while FDI shows limited impact in ASEAN but negatively affects ANS in SAARC, reflecting institutional constraints. Overall, the results highlight that sustainability transitions in developing Asia are context-specific, shaped by structural conditions, institutional capacity, and stages of development. Policy implications emphasize the need to overcome fossil dependence in ASEAN, modernize biomass use in SAARC, design region-specific green investment frameworks, and leverage digitalization to align growth with SDGs 7, 8, 12, and 13.