Impact of political stability on renewable energy consumption in ASEAN-9

Abstract

This research investigates how the governance (G) pillar of the ESG affects the renewable energy consumption (REC) of ASEAN-9 countries over the period 2000-2023. While ASEAN's renewables uptake is still less than 20 percent, which is less than the 23 percent APAEC 2025 target, the governance factors of this gap have yet to be comprehensively tested at country level, even though the regional sustainable-finance architecture has been established. The nine ASEAN economies (Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) provide a balanced panel of 216 country-years. The renewable energy component of overall final energy consumption is the indicator for REC, while political stability is represented by the World Bank Worldwide Governance Indicators. Further determinants are not included as controls, but are entered as determinants, such as GDP per capita, FDI, trade openness and inflation. A random-effects model with cluster robust standard errors is used, which is built mostly on the theory of energy transition and institutional theory. FDI and inflation are insignificant. These patterns do not invalidate the theories but reflect the ASEAN energy mix, where traditional biomass is the prominent fuel for poorer, less stable countries like Cambodia, Laos and Myanmar, while the amount of the traditional fuel is low for stable, fossil-fuel intensive countries like Singapore and Malaysia. It is the first study to focus on political stability as ASEAN-9's main panel and shows that the overall indicator can misrepresent the actual progress in clean energy. It calls for differentiation between the traditional renewables and modern renewables in ASEAN taxonomies, providing governments and development banks and green-bond issuers with actionable guidance.