How energy intensity and global energy dynamics shape renewable energy transition in APEC economies

This study examines the critical factors influencing the adoption of modern renewable energy in selected APEC countries from 1997 to 2023, with a focus on their implications for sustainable development and environmental sustainability. Using dynamic panel data estimation techniques (Arellano–Bond and system dynamic panel-data estimation), we analyze the interplay between energy intensity, world energy balances, economic globalization, and the shadow economy in shaping the share of modern renewables in total final energy consumption. Our results indicate that higher energy intensity reduces renewable energy adoption, reflecting systemic challenges in integrating clean energy into high-demand systems. Conversely, world energy balances and economic globalization enhance renewable energy penetration, driven by decarbonization policies, technological advancements, and cross-border collaboration. Surprisingly, the shadow economy also plays a positive role, suggesting that informal sector activities may facilitate small-scale renewable energy investments. From a sustainability perspective, these findings underscore the need for APEC economies to prioritize energy efficiency, strengthen international cooperation, and implement inclusive policies that support renewable energy transitions. By addressing structural barriers and leveraging globalization, APEC nations can accelerate progress toward Sustainable Development Goals (SDGs), particularly SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action). Policymakers are encouraged to design targeted interventions, including green financing mechanisms, technology transfer programs, and regulatory incentives, to align economic growth with long-term environmental sustainability.