Energy consumption‐economic growth nexus: How does sectorial differentials affects sustainable development?

Abstract

Energy, being one of the significant drivers of growth, has gained much focus in the last four decades. A connection between energy and growth exists in the economy: on the one hand, energy is a vital factor of production while growth improves living standards, which increases energy consumption on the other hand. Previous studies on the energy‐growth nexus paid less attention to sectorial differentials in the consumption of energy and growth. Also, the literature could not relate that to sustainable development. Thus, this study explores the sectorial differentials in energy consumption and how they affect the energy‐growth nexus within the context of sustainable development. The research employed secondary data for 46 sub‐Saharan Africa (SSA) countries for the period 2007 to 2020. Using the General Methods of Moments estimation technique, we found that all the measures of energy consumption positively affect economic growth. Also, CO2 intensity is positively related to growth in the economy while CO2 emissions from solid fuels negatively affect economic growth. Again, Foreign Direct Investment (FDI) is positively impacting economic growth and Gross Domestic Product (SSA) per energy use. Policy implications are discussed in the paper.

Analysis of energy consumption and change structure in major economic sectors of Pakistan

“…In addition, different studies have seen different variables that impact energy use in various countries and multiple industries, sectors and timeframes. For example, Kulu et al [ 23 ] for Sub-Saharan African countries using the General Methods of Moments; Xu et al [ 24 ] for China’s energy and environmental perspectives in various sectors; Raza and Lin [ 25 ] for Pakistan’s factor productivity under energy and economic growth; Raza and Tang [ 26 ] for Pakistan’s nuclear energy, economy and CO 2 emissions; Yu [ 27 ] for desirable capital flows in the emerging economies. Nevertheless, many researchers paid attention to the issue of CO 2 emissions from various sectors, including industry, agriculture, and transport.…”