• Energy Research

The European Union (EU) is at the forefront of policy initiatives to address worsening environmental challenges of the 21st century. Although the EU is a financially developed zone, it is still unclear if inclusive finance enhances better eco-efficiency given the economic growth drive of the continent that has triggered high eco-intensity with the resultant historical anthropogenic emissions. Hence, the incessant calls for environmental policy initiatives to tackle climate challenges. Hence, we scrutinize whether environmental policy stringency (ENI) makes difference in attaining climate goals while examining the connectedness of inclusive finance and eco-efficiency among 14 EU countries. Deploying method of Moments Quantile Regression in data analysis facilitated the incorporation of renewable energy, reliance on natural resources, and demographic factor. We observed that inclusive finance does not necessarily curtail worsening eco-intensity if ENI is absent. Essentially, while renewable energy boosts eco-efficiency, natural resources depletion and demographic factor abate EU's eco-efficiency. However, environmental policy stringency positively moderates the undesirable ecological impacts of inclusive finance in the EU. Hence, while it's recommended to keep the momentum on renewable energy investments, the EU needs to continue to leverage environmental policy stringency to curtail the impacts of financial inclusivity on the bloc's eco-intensity. © 2025 The Authors Author keywords Eco-efficiency; Environmenta

While climate change mitigation agenda and energy governance are the central concerns of climatologists and energy-environmental scientists, the mainstream literature seems silent on whether a decentralized governance structure is desirable for complex economic systems and governmental intervention approaches to realize sustainable environments. To frame this critical research gap, we investigate the contribution of fiscal decentralization in moderating the influence of economic complexity and government intervention on energy and carbon efficiency in the presence of real GDP per capita. We employ a panel method of moments quantile regression (MQR) on data from selected seven fiscally decentralized OECD countries over the 1995-2018 period. The empirical results uncovered that economic complexity causes a drop in energy efficiency (at 1, 5, and 10% significance levels), with a more magnified effect in countries with low environmental sustainability levels. Conversely, our findings exerted that government intervention discourages energy and carbon intensity (at diversified significance levels as per probability scores of 0.01, 0.05, and 0.10), with heterogeneous degrees of impact across diversified model specifications. Regarding direct influence, our outcomes exhibited that expenditure and revenue decentralization aid in energy and carbon efficiency. Concerning moderation effects, expenditure and revenue decentralization successfully rejuvenate the environmental sustainability effects of economic complexity and government intervention (at 1 and 5% significance levels). Finally, our study gauged that the EKC phenomenon exists among the sampled OECD members, indicating that economic growth in the region will be the driving force behind the region's long-term environmental sustainability. Estimation results are robust to the alternative dependent variable, carbon intensity and alternative econometric technique, ordinary least squares with Driscoll-Kraay standard errors. A fiscally decentralized paradigm is desirable from a policy standpoint for government intervention in complex economies to realize environmental sustainability goals.

AbstractTo a large extent, the theories and concepts behind the effect of ecological footprint have been the paramount concern of the recent literature. Since the rising and falling of environmental degradation have been a continuous issue since the first phase of development, determinants such as economic complexity may play a critical role in achieving long-term sustainable development in the framework of environmental Kuznets curve (EKC) paradigm. Therefore, this research expands on the notion of an EKC paradigm for the world’s top ten most complex economies by considering four variables, such as real GDP per capita, electricity consumption, trade openness, and a new putative factor of environmental obstacle, the economic complexity index (ECI). This is one of the first studies to look at the impact of ECI on the ecological footprint of a specific sample from 1998 to 2017. The findings demonstrate a continuous inverted U-shaped link between real GDP per capita, the square of real GDP per capita, and ecological footprint. The EKC hypothesis is found to be valid in the long term in the examined complex economies. The findings of the panel autoregressive distributed lag (ARDL) of the pooled mean group (PMG) and fully modified ordinary least squares (FMOLS) estimations demonstrate that in the long term, electric power usage contributed to the carbon footprints. Furthermore, the economic complexity index and trade openness increase environmental performance over time. To determine if there is causation between the variables, we employ the panel vector error correction model (VECM) framework. Particularly, the results show unidirectional causality running from electric power consumption to ecological footprint and bidirectional causal relationship between (1) economic growth and ecological footprint; (2) square of economic growth and ecological footprint; (3) economic complexity index and ecological footprint; and (4) trade openness and ecological footprint.

Since curbing the upward trend of energy consumption has become a global pursuit in achieving environmental sustainability, macroeconomic factors such as energy transition and international tourism may be of crucial importance in mitigating environmental degradation. However, the combined role of economic welfare, population, international tourism, and energy transition towards mitigating environmental degradation has not been investigated extensively. In this regard, this study looks at the combined interplay between these variables for a panel of ten southeastern Europe (SEE) countries, covering the period of 1997–2018 under the umbrella of the environmental Kuznets curve (EKC) phenomenon. Two indicators of environmental degradation, namely, ecological footprint and carbon intensity, were used in this study. The ordinary least squares (OLS) regression with Driscoll–Kraay (DK) and the panel Method of Moments Quantile Regression (MMQR) with fixed effects were used to disclose the following outcomes: firstly, the environmental degradation–economic welfare nexus firmly established an inverted U-shaped relationship, thereby depicting the validity of the EKC hypothesis. Secondly, energy transition and international tourism manifest negative effects: they induce environmental degradation. Thirdly, the impact of the population is positive but not significant. Given the empirical outcomes, energy transition and international tourism are proposed as critical to mitigating the environmental degradation of the inspected sample of countries.

The present study uses both carbon dioxide emission and ecological footprints as proxies for environmental degradation to examine the environmental Kuznets curve hypothesis for the top three emitters from Asia, i.e., China, India, and Japan. To this end, the autoregressive distributed lag model for time series and panel estimation is used for a period spanning over 1980-2016. For carbon dioxide emission, China presents an inverted-U shape of the environmental Kuznets curve, while a U-shape relationship is found for India and Japan. Similarly, when the hypothesis is tested with the ecological footprint, Japan offers an inverted U-shape and U-shaped association is detected for China and India. The panel analysis indicates the existence of the environmental Kuznets curve with both proxies of environmental degradation. Besides, human capital and renewable energy promote environmental sustainability, while non-renewable energy use hinders environmental quality. The findings of this study suggest that in order to meet the combined goals of economic growth and environmental protection, the three economies, i.e., China, India, and Japan, should employ renewable energy-enabled technology.

El propósito de este artículo de investigación es proporcionar la nueva evidencia sobre el vínculo entre el consumo de ENERGÍA (ENE) y el crecimiento económico (PIB) mientras se controla el impacto de las emisiones de CO2 (CO) en el caso de los países del CCG (Consejo de Cooperación del Golfo). Para realizar el estudio empírico hemos empleado la metodología panel VAR en el periodo 1980-2014. Los resultados sugieren que el crecimiento económico aumenta el consumo de energía. Sin embargo, se informa del vínculo negativo entre las emisiones de CO2 y el crecimiento económico, lo que implica la gran conciencia de los países del CCG sobre los problemas ambientales relacionados con la energía basada en combustibles fósiles. Por lo tanto, existe un serio incentivo en estos países para hacer frente a los posibles problemas ambientales. Una de las buenas alternativas es la energía renovable. Además, el aumento de la eficiencia energética se considera una tarea importante en el futuro. Palabras clave: crecimiento económico; consumo de energía; Clasificaciones JEL del Consejo de Cooperación del Golfo: O13; O44 DOI: https://doi.org/10.32479/ijeep.7872 Le but de cet article de recherche est de fournir de nouvelles preuves sur le lien entre la consommation d'énergie (ENE) et la croissance économique (PIB) tout en contrôlant l'impact des émissions de CO2 (CO) dans le cas des pays du CCG (Conseil de coopération du Golfe). Pour mener l'étude empirique, nous avons utilisé la méthodologie VAR du panel dans la période 1980-2014. Les résultats suggèrent que la croissance économique augmente la consommation d'énergie. Cependant, le lien négatif entre les émissions de CO2 et la croissance économique est signalé, ce qui implique la grande sensibilisation des pays du CCG aux problèmes environnementaux liés à l'énergie basée sur les combustibles fossiles. Ainsi, il existe une incitation sérieuse dans ces pays à faire face aux problèmes environnementaux potentiels. L'une des bonnes alternatives est l'énergie renouvelable. En outre, l'augmentation de l'efficacité énergétique est considérée comme une tâche importante à l'avenir. Mots-clés : croissance économique ; consommation d'énergie ; Classification JEL du Conseil de coopération du Golfe : O13 ; O44 DOI : https://doi.org/10.32479/ijeep.7872 The purpose of this research article is to provide the fresh evidence on the link between energy consumption (ENE) and economic growth (GDP) while controlling for the impact of CO2 emissions (CO) in the case of GCC (Gulf Cooperation Council) countries. To conduct the empirical study we have employed the panel VAR methodology in the period 1980-2014. The results suggest that economic growth increases the energy consumption. However, the negative link between CO2 emissions and economic growth is reported, implying the great awareness of the GCC countries on the environmental problems connected with the fossil fuels based energy. Thus, there is a serious incentive in these countries to deal with the potential environmental issues. One of the good alternatives is renewable energy. In addition, the increase in the energy efficiency is considered to be an important task in the future. Keywords: economic growth; energy consumption; Gulf Cooperation Council JEL Classifications: O13; O44 DOI: https://doi.org/10.32479/ijeep.7872 الغرض من هذه المقالة البحثية هو تقديم أدلة جديدة على العلاقة بين استهلاك الطاقة والنمو الاقتصادي مع التحكم في تأثير انبعاثات ثاني أكسيد الكربون في حالة دول مجلس التعاون الخليجي. لإجراء الدراسة التجريبية، استخدمنا منهجية VAR للفريق في الفترة 1980-2014. تشير النتائج إلى أن النمو الاقتصادي يزيد من استهلاك الطاقة. ومع ذلك، تم الإبلاغ عن العلاقة السلبية بين انبعاثات ثاني أكسيد الكربون والنمو الاقتصادي، مما يعني وعي دول مجلس التعاون الخليجي الكبير بالمشاكل البيئية المرتبطة بالطاقة القائمة على الوقود الأحفوري. وبالتالي، هناك حافز جدي في هذه البلدان للتعامل مع القضايا البيئية المحتملة. أحد البدائل الجيدة هو الطاقة المتجددة. بالإضافة إلى ذلك، تعتبر الزيادة في كفاءة الطاقة مهمة مهمة في المستقبل. الكلمات المفتاحية: النمو الاقتصادي ؛ استهلاك الطاقة ؛ تصنيفات JEL لمجلس التعاون الخليجي: O13 ؛ O44 DOI: https://doi.org/10.32479/ijeep.7872

Since the developed world's economic prosperity has been heavily reliant on excessive fossil-based energy consumption, it has posed severe environmental quality challenges. This research attempts to revisit the relationship between income and anthropogenic emissions in the context of the environmental Kuznets curve (EKC) theory by considering electric power consumption, urbanization, and democratic accountability index in the Gulf Cooperation Council (GCC) region. It employs annual frequency panel data from 1990 through 2019 and three alternative advanced econometric estimation techniques. The main findings are as follows: Firstly, the EKC results for the whole sample strongly support the proposition of an inverse U-shaped connection between anthropogenic emissions and affluence in the long run. Secondly, the country-specific results confirm EKC only in Saudi Arabia and Bahrain, while the remaining countries demonstrate a U-shaped connection. Thirdly, the democratic accountability promoted anthropogenic emissions implying that it failed to contribute to environmental protection. It means that democratic setup in the GCC region performs poorly in accomplishing climate change mitigation and Sustainable Development Goals (SDGs). Fourthly, electric power consumption and urbanization impart positive and negative impacts on anthropogenic emission, respectively. These findings are found robust across the fully modified ordinary least square (FMOLS), bias-corrected LSDV (least squares dummy variable) (LSDV), and pooled mean group (PMG) estimators. Finally, Dumitrescu-Hurlin panel causality shows that (i) income and urbanization establish a two-way causality with the anthropogenic emissions. (ii) However, a unidirectional causal connection is revealed from electric power consumption and democratic accountability index to anthropogenic emissions. The findings suggest that the GCC region should prioritize environmental protection and SDGs across the political aims' recipe since it would direct the region on the path of climate change mitigation.

While natural resource consumption is critical for almost all production processes, the overdependence on and poor governance of those resources might result not only in natural resource depletion but also in ecological unsustainability. Against this background, the present research explores the novel perspective on how financial inclusivity moderates the effects of decentralized governance systems and natural resource reliance on ecological sustainability in the presence of research and development (R&D) expenditures. This research employs a novel method of moments quantile regression on data from eight selected OECD countries during 1995–2020. It is found that decentralized governance systems deteriorate ecological sustainability across all quantiles, with a more substantial impact for higher quantiles of ecological intensity. Natural resource reliance also hinders ecological sustainability, with the degree of effects decreasing from lower to higher quantiles of ecological intensity. Financial inclusion directly mitigates ecological unsustainability, manifesting a more powerful influence in ecologically more intensive countries. Concerning moderation, financial inclusivity negatively moderates the influence of decentralized governance systems and natural resource reliance on ecological intensity, showing stronger relationships in ecologically more intensive countries. Taking the other covariates into account, the EKC curve is uncovered to exist for all levels of ecological sustainability. Moreover, the labor force participation rate exerts ecological pressures, especially for countries with low ecological sustainability. Besides, R&D expenditures are negatively associated with ecological intensity and are responsible for the betterment of the OECD's ecological sustainability. The baseline findings are robust to those of additional models employing ecological footprint as an alternative dependent variable. Findings implicate that subnational governments should promote (i) green microfinancing to resource-efficient investments, (ii) funding to small businesses extending sustainable business solutions, (iii) green finance thinking among the general public, and (iv) financing to localized sustainability projects. © 2023 International Association for Gondwana Research