Digitalization and Renewable Energy Transition Synergy in ASEAN Economies: Pathways to Environmental Sustainability

This study empirically investigates the synergistic effects of digitalization and the renewable energy transition on environmental sustainability—measured by the Load Capacity Factor (LCF)—in five ASEAN economies (Indonesia, Malaysia, the Philippines, Thailand, Vietnam) from 1995 to 2022. Utilizing a composite digitalization index constructed via Principal Component Analysis (PCA), the research employs robust panel methodologies (AMG, CCEMG, and CS-ARDL) to account for cross-sectional dependence and heterogeneity. The findings demonstrate that both digitalization and renewable energy significantly enhance LCF, with a one-standard-deviation increase in the digital index boosting LCF by 12.6%. Conversely, economic growth exerts a detrimental effect. Causality tests confirm a reinforcing bidirectional relationship between sustainability and its key drivers. The study concludes that integrated policies fostering low-carbon digital infrastructure and incentivizing renewables are crucial for achieving Sustainable Development Goals in these rapidly evolving, resource-dependent regions.