Link Between Renewable and Non-renewable Energy Consumption and Co2 Emissions: A Monte-Carlo Simulation Study

Energy consumption is an indispensable need in economic activities as well as in daily life. However, excessive use of energy sources, particularly nonrenewable energy, leads to the depletion of natural resources and significant environmental impacts. Most of previous studies, where the link between energy use and environmental pollution is analyzed within the frequentist framework, could not meaningfully interpret p-value non-significance. In the present research, by using the generalized least squares (GLS) frequentist method in comparison with a Bayesian inference, the authors clarify the effect of each type of energy on CO2 emissions in 5 ASEAN countries during the period 1990–2019. According to the outcomes obtained both by the Bayesian and frequentist methods, non-renewable energy consumption exacerbates environmental issues by increasing CO2 emissions.