Renewable Energy Resilience: The Impact of Economic Policy in South Asia

Abstract

This study examines the impact of economic policy uncertainty (EPU) on renewable energy adoption in South Asia, a region at the crossroads of rapid economic growth and environmental challenges. Using panel data from 2000 to 2023 and advanced econometric methods, the findings reveal that while EPU can discourage short-term renewable energy investment, it may encourage long-term shifts as firms adapt to uncertainty. Institutional quality, trade openness, and foreign investment emerge as key factors that mitigate the adverse effects of EPU and support renewable energy development. These insights focus on the importance of stable policies and robust institutional frameworks to foster a sustainable energy transition. By leveraging these findings, South Asian policymakers can chart a path toward a resilient, low-carbon future, ensuring that economic development aligns with environmental sustainability and longterm energy security.