Renewable energy consumption, financial development, and environmental sustainability in Pacific Island economies

The present paper reviews the effects of renewable energy consumption, economic development and financial development on environmental sustainability in the Pacific. A non-stationary panel data modelling framework is used to investigate the effects in a balanced sample of six major small island economies from 1990 to 2020. The findings reveal that renewable energy consumption improves environmental sustainability and economic development and financial development worsen it. Accordingly, the findings suggest that enhancing environmental sustainability in the Pacific requires significant financial sector reforms, adoption of sustainable development practices and investment in renewable energy infrastructure in the Pacific.