Economic Advancement and Renewable Energy Transition: Exploring the Integral Role of Trade Openness, Digital Transition, and Urbanization Among the NAFTA Economies

As the global imperative for sustainable energy intensifies, understanding how various socio-economic factors either facilitate or impede the adoption of renewable technologies is crucial. The research contextualizes the unique interplay of these factors in the North American Free Trade Agreement (NAFTA) region, offering insights into the complex interplay between economic advancement (ECA), trade openness (TOP), population growth (POG), urbanization (URB), and digital technology (DTE) in shaping the trajectory of renewable energy transition (RET) employing panel data spanning from 1990 to 2020. The research incorporated the Driscoll and Kraay (DSK) and the newest CS-ARDL econometric approach for estimating using EViews software. The findings indicated a positive correlation between economic advancement, digital technology adoption, and TOP with the progress of RET in the NAFTA region. However, challenges arise from the negative impacts of POG and URB, particularly in meeting the heightened energy demands and rebuilding existing urban landscapes with sustainable technologies. Finally, there is a unidirectional causality among POG, URB, DTE, and RET, while a bidirectional causality exists among ECA, TOP, and RET. The paper outcomes offer valuable policy implications and intuitions for policymakers, businesses, and researchers seeking to navigate the complexities of renewable energy transition within the NAFTA economies. Addressing the negative influences of population growth and urbanization requires targeted interventions and innovative solutions to ensure a harmonious integration of economic development, technological innovation, and sustainable energy practices to pursue a greener and more resilient future for North America.