AI, ESG, and Energy Transition in Emerging Markets: A Multidimensional Analysis

As the global energy system shifts from fossil fuels to renewable sources, AI has become a crucial component of this transformation. This study explores the influence of AI on the energy transition (ET) in emerging markets from 1993 to 2019, focusing on the role of environmental, social, and governance (ESG) performance. The results are summarized as follows. First, AI accelerates ET, and this finding remains consistent after robustness checks and addressing potential endogeneity issues. Second, AI has an indirect effect on ET by enhancing environmental and social performance. Third, AI has a nonlinear impact on ET across different levels of governance. As governance performance overextends, the positive effect of AI on ET decreases. Fourth, the heterogeneity analysis reveals that the threshold effect of governance performance varies across different income levels. This study presents several recommendations for integrating AI into renewable energy development.