The Effect of Sustainability Drivers on Economic Growth in G20 Countries: A Quantile Regression Approach

Mehdi Seraj; Ata Pervar; Huseyin Ozdeser

doi:10.53941/gssd.2026.100025

Abstract

This study investigates the distributional linkages between core sustainability indicators and economic growth across G20 economies from 2000 to 2024. Employing second-generation panel econometric techniques that account for cross-sectional dependence and slope heterogeneity, we implement the Method of Moments Quantile Regression (MMQR) alongside a Feasible Generalized Least Squares (FGLS) baseline. The results obtained empirically show that Energy Intensity exhibits a positive marginal association with annual real GDP per capita growth that increases continuously up to the upper quantiles (0.537 to 0.968 percentage points), which is due to the dominance of production scale of industry during periods of fast economic development. In contrast, Per Capita CO₂ Emissions have an increasing negative impact on growth from median up to upper quantiles (−0.220 to −0.397 percentage points), which underlines the growing economic costs of environmental damage. Access to Electricity has regime-specific relevance and has statistically significant positive contribution to growth only in moderate and high growth regimes. Renewable Energy Consumption (REC) has a positive marginal impact on growth in low growth regimes (0.084 percentage points at τ = 0.05), while its marginal contribution diminishes and becomes statistically insignificant in the upper quantiles. These distributional asymmetries demonstrate that uniform macroeconomic strategies are inadequate, underscoring the necessity of regime-targeted sustainability policies across the G20.

References

1.
Ali, M.; Seraj, M. Nexus between energy consumption and carbon dioxide emission: evidence from 10 highest fossil fuel and 10 highest renewable energy-using economies. Environ. Sci. Pollut. Res. 2022, 29, 87901–87922.
2.
Bhat, M.Y.; Sofi, A.A.; Sajith, S. Domino-effect of energy consumption and economic growth on environmental quality: Role of green energy in G20 countries. Manag. Environ. Qual. Int. J. 2022, 33, 756–775. https://doi.org/10.1108/meq-08-2021-0194.
3.
Naseem, S.; Hu, X.; Sarfraz, M.; et al. Strategic assessment of energy resources, economic growth, and CO₂ emissions in G-20 countries for a sustainable future. Energy Strategy Rev. 2024, 52, 101301. https://doi.org/10.1016/j.esr.2024.101301.
4.
Göktolga, Z.G. Determining the Relationship between Economic Growth, Carbon Emission and Energy Consumption: Panel Cointegration and Causality Approach in G20 Countries. Yildiz Soc. Sci. Rev. 2025, 11, 1–11. https://doi.org/10.51803/yssr.1544004.
5.
Koenker, R.; Hallock, K.F. Quantile regression. J. Econ. Perspect. 2001, 15, 143–156.
6.
Machado, J.A.F.; Silva, J.S. Quantiles via moments. J. Econom. 2019, 213, 145–173. https://doi.org/10.1016/j.jeconom.2019.04.009.
7.
Christian, B.S. Access to Electricity and Economic Growth in the WAEMU: Causality Analysis. Appl. Econ. Financ. 2022, 9, 43–54. https://doi.org/10.11114/aef.v9i3.5657.
8.
Pala, A. Energy and economic growth in G20 countries: Panel cointegration analysis. Econ. Bus. Lett. 2020, 9, 56–72. https://doi.org/10.17811/ebl.9.2.2020.56-72.
9.
Milin, I.A.; Mungiu Pupazan, M.C.; Rehman, A.; et al. Examining the Relationship between Rural and Urban Populations’ Access to Electricity and Economic Growth: A New Evidence. Sustainability 2022, 14, 8125. https://doi.org/10.3390/su14138125.
10.
Best, R.; Burke, P.J. Electricity availability: A precondition for faster economic growth? Energy Econ. 2018, 74, 321–329. https://doi.org/10.1016/j.eneco.2018.06.018.
11.
Csereklyei, Z.; Rubio-Varas, M.; Stern, D.I. Energy and Economic Growth: The Stylized Facts. Energy J. 2016, 37, 223–256. https://doi.org/10.5547/01956574.37.2.zcse.
12.
Rajbhandari, A.; Zhang, F. Does energy efficiency promote economic growth? Evidence from a multicountry and multisectoral panel dataset. Energy Econ. 2018, 69, 128–139.
13.
Li, Q.; Zhao, M.; Hei, P.; et al. Driving sustainable development: Exploring the Nexus of financial inclusion, green mobility, and CO₂ emissions in China's natural resource landscape. Resour. Policy 2024, 89, 104656.
14.
Deichmann, U.; Reuter, A.; Vollmer, S.; et al. Relationship between Energy Intensity and Economic Growth: New Evidence from a Multi-Country Multi-Sector Data Set; Report 8322; World Bank: Washington, DC, USA, 2018. https://doi.org/10.1596/1813-9450-8322.
15.
Semeniuk, G. Energy in Economic Growth: Is Faster Growth Greener? Department of Economics, SOAS University of London: London, UK, 2018.
16.
Li, H.; Li, F.; Shi, D.; et al. Carbon emission intensity, economic development and energy factors in 19 G20 countries: Empirical analysis based on a heterogeneous panel from 1990 to 2015. Sustainability 2018, 10, 2330. https://doi.org/10.3390/su10072330.
17.
Mar’I, M.; Seraj, M.; Tursoy, T. The role of fiscal policy in G20 countries in the context of the environmental Kuznets curve hypothesis. Energies 2023, 16, 2215.
18.
Zhou, J.; Ma, Z.; Wei, T.; et al. Threshold Effect of Economic Growth on Energy Intensity—Evidence from 21 Developed Countries. Energies 2021, 14, 4199. https://doi.org/10.3390/en14144199.
19.
Chou, C.H.; Ngo, S.L.; Tran, P.P. Renewable energy integration for sustainable economic growth: Insights and challenges via bibliometric analysis. Sustainability 2023, 15, 15030. https://doi.org/10.3390/su152015030.
20.
Kasperowicz, R.; Bilan, Y.; Štreimikienė, D. The renewable energy and economic growth nexus in European countries. Sustain. Dev. 2020, 28, 1086–1093. https://doi.org/10.1002/sd.2060.
21.
Paramati, S.R.; Apergis, N.; Ummalla, M. Dynamics of renewable energy consumption and economic activities across the agriculture, industry, and service sectors: Evidence in the perspective of sustainable development. Environ. Sci. Pollut. Res. 2018, 25, 1375–1387.
22.
He, C.; Awosusi, A.A.; Eweade, B.S.; et al. Do renewable energy, economic globalization, and financial development foster green growth in France? Evidence from a wavelet-quantile approach. Int. J. Sustain. Dev. World Ecol. 2025, 32, 574–588. https://doi.org/10.1080/13504509.2025.2513257.
23.
Thombs, R.P. The Paradoxical Relationship between Renewable Energy and Economic Growth: A Cross-National Panel Study, 1990–2013. J. World-Syst. Res. 2017, 23, 540–564. https://doi.org/10.5195/jwsr.2017.711.
24.
Shah, W.U.H.; Zhang, X.; Yasmeen, R.; et al. Green transition and economic growth in G20 countries: Evidence from disaggregated energy sources. Environ. Sci. Pollut. Res. 2023, 30, 92206–92223. https://doi.org/10.1007/s11356-023-28781-6.
25.
Uçaravcı, M.; Akın, T. A comparative analysis of the relationship between renewable energy production and economic growth. Alphanumeric J. 2023, 11, 1–16.
26.
Singh, T. Does international trade cause economic growth? A survey. World Econ. 2010, 33, 1517–1564. https://doi.org/10.1111/j.1467-9701.2010.01243.x.
27.
Pradhan, R.P.; Arvin, M.; Hall, J.H.; et al. Financial depth and the trade openness-economic growth nexus: Evidence from cross-country panel data. J. Econ. Adm. Sci. 2017, 33, 20–45.
28.
Tripathi, J.S. Trade-growth nexus: A study of G20 countries using simultaneous equations model with dynamic policy simulations. J. Policy Model. 2023, 45, 806–816. https://doi.org/10.1016/j.jpolmod.2023.07.004.
29.
Vintilă, G.; Mocanu, A.R. G20 Member Countries and their FDI’s Potential to Influence the Economic Growth—Econometric Evidence Revealing a Positive Effect. J. Econ. Stud. Res. 2024, 2024, 1–9. https://doi.org/10.5171/2024.669887.
30.
Halkos, G.; Gkampoura, E.C. Examining the linkages among carbon dioxide emissions, electricity production and economic growth in different income levels. Energies 2021, 14, 1682. https://doi.org/10.3390/en14061682.
31.
Nguyen, T.T.; Pham, T.A.T.; Tram, H.T.X. Role of information and communication technologies and innovation in driving carbon emissions and economic growth in selected G-20 countries. J. Environ. Manag. 2020, 261, 110162. https://doi.org/10.1016/j.jenvman.2020.110162.
32.
Knight, K.W.; Schor, J.B. Economic Growth and Climate Change: A Cross-National Analysis of Territorial and Consumption-Based Carbon Emissions in High-Income Countries. Sustainability 2014, 6, 3722–3731. https://doi.org/10.3390/su6063722.
33.
Stern, D.I. The environmental Kuznets curve after 25 years. J. Bioecon. 2017, 19, 7–28. https://doi.org/10.1007/s10818-017-9243-1.
34.
Sari, C.D.; Gunarto, T.; Nirmala, T.; et al. Analysis of Factors Influencing Energy Intensity in G20 Countries. Asian J. Econ. Bus. Account. 2023, 23, 151–157. https://doi.org/10.9734/ajeba/2023/v23i221143.
35.
Wang, Y.; Shao, S.; Gao, Q.; et al. Life cycle environmental impact and economic analysis of post-combustion carbon capture technologies in supercritical coal-fired power plants. Environ. Impact Assess. Rev. 2025, 114, 107933.
36.
Pesaran, M.H. General diagnostic tests for cross-sectional dependence in panels. Empir. Econ. 2021, 60, 13–50.
37.
Pesaran, M.H.; Yamagata, T. Testing slope homogeneity in large panels. J. Econom. 2008, 142, 50–93.
38.
Pesaran, M.H. A simple panel unit root test in the presence of cross-section dependence. J. Appl. Econom. 2007, 22, 265–312.
39.
Pesaran, M.H. General diagnostic tests for cross section dependence in panels. Economics 2004, 1240, 1.
40.
Friedman, M. The use of ranks to avoid the assumption of normality implicit in the analysis of variance. J. Am. Stat. Assoc. 1937, 32, 675–701.
41.
Frees, E.W. Assessing cross-sectional correlation in panel data. J. Econom. 1995, 69, 393–414.
42.
Wang, H.; Şağbanşua, L. Exploring Trade Openness and Logistics Efficiency in the G20 Economies: A Bootstrap ARDL Analysis of Growth Dynamics. arXiv 2025, arXiv:2509.00368.

Scilight Press

Author Information

Abstract

Keywords

References

About Scilight

Journals

Publishing Policies

Contact Us