[In Press] Green energy and institution : a study of energy transition and sustainable environment development

This study examines the possibility of achieving climate goals (energy transition and clean and sustainable environmental development) through the green energy and institutional quality policies for the Australia. Australia is a major producer and exporter of coal to the rest of the world. Considering the position of Australia in fossil fuels market and its reliance on coal as source of its electricity, this study adopts Australia’s data of 1996Q1 2018Q4 to test the possibility of achieving climate goals (energy transition and clean and sustainable environmental development) for the country. Institutional quality is adopted in this study to fill the gap in the study of Australia’s sustainable development goal. Prior literature reveals that numerous scholars have investigated various aspects of Australia’s sustainable development, under different indicators yet gaps persist in institutional quality literature. The novelty of this study will reveal the best practice of achieving sustainable development through good governance. This can be adopted by other economies especially, the emerging countries in framing best polices in addressing their environmental issues and achieving sustainable development. Scientific methods, such as cointegration, autoregressive distribution lag-ARDL and granger causality, are all utilized for clear insight into the chosen objectives. Findings from the linear (ARDL) dynamics point toward the ability of Australia to achieve its climate goals through green energy and instructional quality policies; hence, significant and negative relationship is found between the policies (green energy-renewables and institution quality), and CO_2. However, significant and positive connection is found among fossils and CO_2. Among the findings is the establishment of EKC hypothesis through inverted U-shaped relationship between economic growth and environment. Results from granger causation uncovered one-way transmission from all the policies to CO₂. Also, bidirectional relationship is established among economic growth, fossil fuels and CO₂; hence, a triangular nexus is found among economic growth, fossil fuels and CO₂. This suggests trade-off among trio in determining the Australian environment. Graphical abstract: (Figure presented.)