Quality, Energy Consumption, and Economic Growth: A Quantitative Approach

Is economic growth fundamentally at odds with our planet’s uncertain future? A groundbreaking global analysis offers a roadmap to reconcile the two. The study examines the dynamic interplay between economic growth, energy consumption, and environmental sustainability across 185 countries from 2000 to 2022. The primary aim is to analyze how these factors interact amidst the intensifying global climate crisis and sustainability commitments, focusing on the trade-offs between energy use and economic expansion. We employ a panel fixed effects model to quantify the effects of the energy consumption, greenhouse gas emissions, and human development on the GDP per capita. Our main contributions indicate: (1) establishing human development, as captured by the Human Development Index (HDI), as a strong determinant of economic growth; (2) demonstrating that while per capita energy consumption positively boosts the GDP per capita, total energy consumption and electricity generation have negative effects, suggesting inefficiencies in energy utilization; and (3) identifying a nonlinear relationship between the GHG emissions and growth, where emissions initially hinder the economic performance but contribute positively when considered alongside energy variables. These findings underscore the critical need for strategic energy management and policy intervention, particularly in the emerging economies, advocating for enhanced energy efficiency, renewable energy integration, and sustainable growth strategies aligned with environmental goals.