Estimating the energy consumption function: evidence from across the globe

Abstract

The motivation for the current study stem from the United Nations Sustainable Development Goals (UN-SDGs) such as access to clean (SDG-7) and responsible energy consumption (SDG-12) and climate change mitigation (SDG-12). This chase for these goals is pertinent for sustainable economic growth and environmental sustainability. This becomes necessary given the global demand for energy which comes has it environmental consequences given anthropogenic effect. To this end, the present study seeks to identify the factors determining the energy consumption function for 79 economies across the globe. For empirical investigation, 44 years data of five regions, namely Asia and Pacific, Europe, Africa, Latin America, and the Middle East and Arab States, is analyzed. A multivariate regression model and the method of least squares are employed to achieve set of objectives. The least squares result of the regions and single country of the regions are not significantly different from each other. Every region exhibits a common narrative that economic growth, carbon emissions, and urbanization are the key factors determining the consumption function in most of the sample economies. The empirical findings revealed that energy consumption function is determined by economic growth, urbanization, and carbon emissions. In the light of these findings, it is recommended that energy policy needs to be designed considering the significance of economic growth and environmental quality, and consequently it leads toward the achievement of the sustainable development goals.

Keywords: CO2 emissions; Carbon reduction; Economic growth; Responsible energy consumption; SDGs; Sustainability.