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Does mineral resource consumption reduce by energy transition and fossil fuel energy intensity? Moderating role of financial inclusion and digitalization

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  • Sun, Na
  • Long, Wei

Abstract

This research examines the nexus of energy transition, energy intensity, and mineral resource consumption in the top five Asian economies (China, India, Korea, Thailand, and Japan) from 1992 to 2021. It also examines the moderating effect of financial inclusion and digitalization in reducing the dependence on mineral resource consumption. Using Cross-Sectional Autoregressive Distributed Lag (CS-ARDL) model, the findings reveal a significant negative impact of the green energy transition on mineral resource consumption over the short run, unlike the findings in the long run, signalling a simultaneous reduction in dependence on mineral resources. This reduction is attributed to heightened research and development and the discovery of alternative materials and technologies. It optimizes material usage in clean energy and promotes a sustainable approach. The outcomes also explored the moderating effects of digitalization and financial inclusion. Financial inclusion negatively influences mineral resource consumption, representing access to capital for eco-friendly technologies and reducing reliance on mineral resources. A positive and significant impact of energy intensity on mineral resource consumption highlights the energy intensity needed to curb overall mineral resource consumption. The study further employs the Augmented mean group (AMG) estimation as a robustness check. It reveals that the moderating effect of digitalization is having an insignificant impact on mineral resource consumption. While financial inclusion significantly moderates, reducing mineral resource consumption in the short run. The government should incentivize green energy adoption through subsidies, tax incentives, and research grants to foster renewable energy development, promoting environmental sustainability and reducing reliance on finite resources.

Suggested Citation

  • Sun, Na & Long, Wei, 2024. "Does mineral resource consumption reduce by energy transition and fossil fuel energy intensity? Moderating role of financial inclusion and digitalization," Resources Policy, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:jrpoli:v:93:y:2024:i:c:s0301420724004227
    DOI: 10.1016/j.resourpol.2024.105055
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