Renewable energy, digitalization, and governance effectiveness: Pathways to environmental sustainability in South Asia

It is widely acknowledged that a sustainable environment is a crucial element in achieving sustainable development. At the 28th Conference of the Parties (COP28), it was acknowledged that climate change is a worldwide concern, which calls for a global strategy to solve this issue. To align with the objectives of COP28 and SDG13, this study examines the factors that influence environmental sustainability from both supply-side and demand-side perspectives. The current study explores the relationship between renewable power production, digitalization, financial modernization, natural resource rent, and the effectiveness of government on carbon dioxide emissions in selected South Asian economies spanning 1998 to 2023. Using the Method of Moments Quantile Regression (MMQR), our findings indicate that dependence on natural resources, digitalization, and financial modernization are substantial factors in carbon dioxide emissions. However, the effectiveness of the government and the production of renewable electricity emerge as mitigating factors, thereby reducing environmental degradation. To reduce carbon emissions in South Asian economies, Policymakers should implement regulations and incentives to ensure that financial development and digitalization support environmental sustainability. They must increase investment in renewable energy and diversify their economies to reduce dependence on non-renewables, while directing natural resource revenues toward green technology R&D. • Analyzes RE, digitalization, and governance as drivers of sustainability. • Digitalization, FM, and resource dependence raise CO₂. • Applies MMQR to capture heterogeneous effects across different levels. • The study offers policy guidance for COP28 and SDG13.