Assessing the Sustainability of Southeast Asia's Energy Transition: A Comparative Analysis

The rapid economic growth in Southeast Asia has heightened concerns about its environmental sustainability, particularly in relation to CO2 emissions. Despite the growing focus on climate change mitigation, the region faces significant challenges in balancing economic development, energy transitions, and environmental conservation. Existing studies often overlook the complex interplay between these factors, leaving a critical gap in understanding how tailored strategies can address country-specific dynamics. To bridge this gap, this study introduces the "Sustainable Energy-Environment Nexus" (SEEN) framework, which integrates economic growth, energy transitions, and environmental conservation as interconnected elements necessary for achieving carbon neutrality in both the short and long run. Using data from eight Southeast Asian countries (Indonesia, Malaysia, China, South Korea, Vietnam, Singapore, Thailand, and Japan) over the period 1990-2023, this study employs the Autoregressive Distributed Lag (ARDL) approach and the Vector Error Correction Model (VECM) technique to analyze the relationships between CO2 emissions, GDP, financial development, forest areas, renewable energy, non-renewable energy consumption, and trade openness. The findings reveal that GDP and non-renewable energy consumption significantly drive CO2 emissions in countries like Indonesia, Malaysia, Japan, and South Korea. Conversely, forest areas, financial development, renewable energy, and trade openness are effective in reducing emissions in countries such as Vietnam and China. This study highlights the critical role of renewable energy adoption while addressing challenges such as inadequate infrastructure and limited technology transfer. It also identifies opportunities for regional cooperation in innovation and policy harmonization. To support sustainable energy development, tailored policy recommendations include incentivizing investments in renewable energy, enhancing technology transfer, expanding forest conservation efforts, and aligning regional renewable energy targets across ASEAN. The SEEN framework provides a robust foundation for advancing research and policy design aimed at reducing CO2 emissions and promoting environmental sustainability across Southeast Asia.