Revisiting global energy efficiency and CO₂ emission nexus: fresh evidence from the panel quantile regression model

Given the importance of energy efficiency in environmental degradation, the effects of energy efficiency and renewable and nonrenewable energy consumption on global environmental pollution were investigated. For this purpose, panel data from 107 countries from 1996 to 2014 were examined. In addition, the present study also tested the well-known environmental Kuznets curve (EKC). The long-run relations were estimated by applying a panel quantile regression (PQR) approach, which is useful for finding heterogeneous effects at lower- and upper-level quantiles of CO₂ emissions. The empirical results indicated that energy efficiency had a significantly negative impact on CO₂ emissions with low intensity at higher-level quantiles.Furthermore, the impact of renewable and nonrenewable energy consumption on environmental degradation was significantly negative and positive across all quantiles, respectively. The empirical results provide evidence supporting an inverted U-shaped nexus between GDP and CO₂, whereby the EKC is found valid. Hence, energy efficiency improvement and renewable energy consumption policies must align with strategies to curb environmental degradation.