Energy Transition and Carbon Emissions in G7 Economics: New Insights from MMQR Estimation.
DOI:
https://doi.org/10.54938/ijemdss.2026.05.2.647Keywords:
Carbon emissions, Energy intensity, Renewable energy, Economic growth, Technological innovation, Urbanization, MMQR, G7 economiesAbstract
This study investigates the effects of energy intensity, renewable energy consumption, economic growth, technological innovation, and urbanization on carbon emissions in G7 countries from 2000 to 2024. The Method of Moments Quantile Regression (MMQR) is employed to capture heterogeneous effects across different emission quantiles, with robustness checks using FGLS and PCSE to confirm the model’s reliability and stability. The findings indicate that energy intensity and economic growth increase carbon emissions across all quantiles, whereas REC significantly reduces environmental pressure. Technological innovation exhibits a rebound effect at higher emission levels, while urbanization contributes to emissions reduction in advanced quantiles, highlighting the nuanced role of sustainable urban planning. Further, findings emphasize the critical importance of integrating energy efficiency, renewable energy adoption, and targeted technological strategies to achieve carbon neutrality in G7 economies. The findings suggest that G7 countries should support renewable energy adoption, enhance energy efficiency, increase green technological innovation, and implement sustainable urban planning to get long-term carbon neutrality.
Downloads
References
Abdulwahab, L. O., Daniel, O., Gul, A., & Bubari, H. U. (2026). The Economic Impact of Digital Health Innovations on Disease Prevention: Cost-Effectiveness, ROI, and Policy Implications. In Reshaping Health Promotion and Disease Prevention Through Digital Innovation (pp. 29-56). IGI Global Scientific Publishing.
Ahmad, N., Raid, M., & Gul, A. (2026). Regional insights into poverty among women-headed households in Pakistan. Development in Practice, 1-10.
Ahmad, U. S., Safdar, S., & Azam, M. (2024). An assessment of bilateral debt swap financing indispensable for economic growth and environment sustainability: a policy implication for heavily indebted countries. Environmental Science and Pollution Research, 31(4), 5716-5734.
Ahmed, Z., Ahmad, M., Murshed, M., Shah, M. I., Mahmood, H., & Abbas, S. (2022). How do green energy technology investments, technological innovation, and trade globalization enhance green energy supply and stimulate environmental sustainability in the G7 countries? Gondwana research, 112, 105-115.
Akhter, T., Ansar, M., & Ullah, I. (2026). Mental Health and Well-Being in the Workplace: A Cross Sectional Analysis of Socioeconomic and Demographic Determinants by Using PDHS 2017-18. Journal of Asian Development Studies, 15(3), 198-213.
Akpan, U. F., & Akpan, G. E. (2012). The contribution of energy consumption to climate change: a feasible policy direction. International Journal of Energy Economics and Policy, 2(1), 21-33.
Andersson, F. N., & Karpestam, P. (2013). CO2 emissions and economic activity: Short-and long-run economic determinants of scale, energy intensity and carbon intensity. Energy Policy, 61, 1285-1294.
Apanasovich, N., & Apanasovich, T. V. (2025). The impact of technological innovations and economic growth on CO2 emissions in the global context. Discover Environment, 3(1), 182.
Asif, M., Zia, M. A., & Bhatti, M. A. (2026). Navigating climate policy uncertainty: how innovation and institutional quality drive GHG emissions reduction in G7 countries: M. Asif et al. Clean Technologies and Environmental Policy, 28(1), 9.
Balsalobre-Lorente, D., Driha, O. M., Bekun, F. V., Sinha, A., & Adedoyin, F. F. (2020). Consequences of COVID-19 on the social isolation of the Chinese economy: accounting for the role of reduction in carbon emissions. Air Quality, Atmosphere & Health, 13(12), 1439-1451.
Borgi, H., Alessa, N., Hamza, F., & Albitar, K. (2024). The impact of green innovation and renewable energy on CO2 emissions in G7 nations. Heliyon, 10(10).
Calvin, K., Dasgupta, D., Krinner, G., Mukherji, A., Thorne, P. W., Trisos, C., ... & Orendain, D. J. (2023). IPCC, 2023: Climate Change 2023: Synthesis Report. Contribution of Working Groups I, II and III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [Core Writing Team, H. Lee and J. Romero (eds.)]. IPCC, Geneva, Switzerland.
Change, O. C. (2007). Intergovernmental panel on climate change. World Meteorological Organization, 52(1-43), 1.
Chen, W., Alharthi, M., Zhang, J., & Khan, I. (2024). The need for energy efficiency and economic prosperity in a sustainable environment. Gondwana Research, 127, 22-35.
Chou, C. H., Ngo, S. L., & Tran, P. P. (2023). Renewable energy integration for sustainable economic growth: Insights and challenges via bibliometric analysis. Sustainability, 15(20), 15030.
Das, S., Choudhury, M. R., Chatterjee, B., Das, P., Bagri, S., Paul, D., ... & Dutta, S. (2024). Unraveling the urban climate crisis: Exploring the nexus of urbanization, climate change, and their impacts on the environment and human well-being–A global perspective. AIMS Public Health, 11(3), 963.
Destek, M. A., & Aslan, A. (2020). Disaggregated renewable energy consumption and environmental pollution nexus in G-7 countries. Renewable energy, 151, 1298-1306.
Dzwigol, H., Kwilinski, A., Lyulyov, O., & Pimonenko, T. (2023). The role of environmental regulations, renewable energy, and energy efficiency in finding the path to green economic growth. Energies, 16(7), 3090.
Erdogan, S., Okumus, I., & Guzel, A. E. (2020). Revisiting the Environmental Kuznets Curve hypothesis in OECD countries: the role of renewable, non-renewable energy, and oil prices. Environmental Science and Pollution Research, 27(19), 23655-23663.
Fatima, M., Naz, S., & Khan, S. U. (2023). Energy Consumption, Economic Growth and Environmental Quality in South Asian Developing Countries: A Panel Data Analysis. Research Journal of Social Sciences and Economics Review, 4(2), 244-258.
Feng, Y., & Xu, R. (2025). Advancing global sustainability: The role of the sharing economy, environmental patents, and energy efficiency in the Group of Seven’s path to sustainable development. Sustainability, 17(1), 322.
Fowlie, M., & Meeks, R. (2021). The economics of energy efficiency in developing countries. Review of environmental economics and policy, 15(2), 238-260.
Friedrichs, J., & Inderwildi, O. R. (2013). The carbon curse: Are fuel rich countries doomed to high CO2 intensities?. Energy Policy, 62, 1356-1365.
Gan, K. E., Taikan, O., Gan, T. Y., Weis, T., Yamazaki, D., & Schüttrumpf, H. (2023). Enhancing renewable energy systems, contributing to Sustainable Development Goals of United Nation and building resilience against climate change impacts. Energy Technology, 11(11), 2300275.
Gul, A., Khan, I. H., Safdar, S., & Redjil, A. (2026). Impact of Climate Change on Energy and Health: Poverty Multivariate Decomposition Analysis Using Evidence From Pakistan DHS 2012-2018. In Advancing Climate Change Mitigation and Resilience Through Innovation and Policy (pp. 93-124). IGI Global Scientific Publishing.
Gul, A., Khan, S. U., & Abbasi, R. A. (2023). Vicious Circle of Health Expenditure: Time Series Evidence from Pakistan. Journal of Contemporary Macroeconomic Issues, 4(1), 57.
Gul, A., Sadiq, S., & Khan, S. U. (2023). Conflicts and The Structure of Economy: A Case of Trade in Pakistan. Journal of Development and Social Sciences, 4(4), 23-42.
Jamal, F., Zhijun, Y., Khan, U. U., Zubair, M., Ahmad, S., Sultan, F., & Ullah, I. (2024). The impact of finance, infrastructure and training on the performance of SMEs in Pakistan. South Asian J Soc Stud Econ, 21(4), 4.
Jiang, Y., & Khan, H. (2023). The relationship between renewable energy consumption, technological innovations, and carbon dioxide emission: evidence from two-step system GMM. Environmental Science and Pollution Research, 30(2), 4187-4202.
Kaika, D., & Zervas, E. (2013). The Environmental Kuznets Curve (EKC) theory—Part A: Concept, causes and the CO2 emissions case. Energy policy, 62, 1392-1402.
Khan, A., Safdar, S., & Hussain, S. (2023). Pakistan's Economic Growth Restraints: The Three-Gap Model. Foundation University Journal of Business & Economics, 8(1).
Khan, A., Safdar, S., & Nadeem, H. (2023). Decomposing the effect of trade on environment: a case study of Pakistan. Environmental Science and Pollution Research, 30(2), 3817-3834.
Khan, M. Z., Khan, Z. U., Khan, A. U., & Gul, A. (2023). Unpacking Informality Dilemma in Private Equity Markets. Journal of Applied Economics & Business Studies (JAEBS), 7(2).
Khan, U. S., Khan, Z. M., & Gul, A. (2023). Democracy's Role in Shaping Pakistan's Economic Growth: An Empirical Evidence From Pakistan. International Journal of Contemporary issues in social sciences, 2(3), 356-367.
Kostakis, I., Papadas, D., & Tsagarakis, K. P. (2025). The link between economic growth, energy intensity, environmental taxes, trade openness, and environmental quality: Evidence for selected European OECD countries. Sustainable Futures, 10, 101183.
Kumar, S., & Rathore, K. (2023). Renewable energy for sustainable development goal of clean and affordable energy. International Journal of Materials Manufacturing and Sustainable Technologies, 2(1), 1-15.
Liang, Y., Ur Rahman, S., Shafaqat, A., Ali, A., Ali, M. S. E., & Khan, H. (2024). Assessing sustainable development in E-7 countries: technology innovation, and energy consumption drivers of green growth and environment. Scientific Reports, 14(1), 28636.
Ma, X., Wang, C., Dong, B., Gu, G., Chen, R., Li, Y., ... & Li, Q. (2019). Carbon emissions from energy consumption in China: Its measurement and driving factors. Science of the total environment, 648, 1411-1420.
Muhammad, N., Khan, Z. U., Iqbal, M. A., Ullah, I., & Ahmad, N. (2025). Impact of Energy Consumption and Economic Growth on Environmental Degradation: Evidence from South Asian Countries. Journal of Asian Development Studies, 14(1), 320-334.
Muhammad, N., Khan, Z. U., Iqbal, M. A., Ullah, I., & Ahmad, N. (2025). Impact of Energy Consumption and Economic Growth on Environmental Degradation: Evidence from South Asian Countries. Journal of Asian Development Studies, 14(1), 320-334.
Nathaniel, S., & Khan, S. A. R. (2020). The nexus between urbanization, renewable energy, trade, and ecological footprint in ASEAN countries. Journal of cleaner production, 272, 122709.
Nunes, L. J. (2023). The rising threat of atmospheric CO2: a review on the causes, impacts, and mitigation strategies. Environments, 10(4), 66.
Paraschiv, L. S., & Paraschiv, S. (2023). Contribution of renewable energy (hydro, wind, solar and biomass) to decarbonization and transformation of the electricity generation sector for sustainable development. Energy Reports, 9, 535-544.
Pata, U. K. (2021). Renewable and non-renewable energy consumption, economic complexity, CO2 emissions, and ecological footprint in the USA: testing the EKC hypothesis with a structural break. Environmental science and pollution research, 28(1), 846-861.
Potrč, S., Čuček, L., Martin, M., & Kravanja, Z. (2021). Sustainable renewable energy supply networks optimization–The gradual transition to a renewable energy system within the European Union by 2050. Renewable and Sustainable Energy Reviews, 146, 111186.
Qing, L., Abbas, J., Najam, H., Ma, X., & Dagestani, A. A. (2024). Investment in renewable energy and green financing and their role in achieving carbon-neutrality and economic sustainability: Insights from Asian region. Renewable Energy, 221, 119830.
Rehman, R., Sadiq, S., Khan, S. U., & Gul, A. (2023). Long Term Trends in Rainfall and Temperature Effects on Food Security in Pakistan: An Analysis of 75 Years (1947-2021). Qlantic Journal of Social Sciences, 4(3), 55-68.
Riaz, S., Khan, S. U., Khan, A. U., & Khan, H. U. (2024). Analysing the impacts of fiscal decentralisation on public services delivery: Evidence from health sector in Pakistan. Qlantic Journal of Social Sciences, 5(1), 141-157.
Safdar, S., Gul, A., & Khan, S. U. (2026). The Role of Green Finance in Advancing Sustainable Development: An Analysis of Financial Instruments and Their Impact on Economic and Environmental Goals. In Green Policies for a Sustainable World (pp. 295-330). Cham: Springer Nature Switzerland.
Safdar, S., Khan, A., & Andlib, Z. (2022). Impact of good governance and natural resouREC rent on economic and environmental sustainability: an empirical analysis for South Asian economies. Environmental Science and Pollution Research, 29(55), 82948-82965.
Schipper, L., Unander, F., Murtishaw, S., & Ting, M. (2001). Indicators of energy use and carbon emissions: explaining the energy economy link. Annual Review of Energy and the Environment, 26(1), 49-81.
Shahid, S., Ullah, I., & Munib, F. (2025). Asian Countries Analysis on Climate Change Impact on Growth of Economy and Food Security. Review of Economic Trends, 2(2), 11-21.
Shokoohi, Z., Dehbidi, N. K., & Tarazkar, M. H. (2022). Energy intensity, economic growth and environmental quality in populous Middle East countries. Energy, 239, 122164.
Tangato, K. F. (2025). The impact of clean technology adoption on carbon emissions: A global perspective. Clean Technologies and Environmental Policy, 27(6), 2683-2700.
Tong, T., Ortiz, J., Xu, C., & Li, F. (2020). Economic growth, energy consumption, and carbon dioxide emissions in the E7 countries: a bootstrap ARDL bound test. Energy, Sustainability and Society, 10(1), 20.
Ullah, I., Nosheen, M., Shah, K. R., & Ahmad, N. (2023). Nexus between economic growth, energy consumption and environmental degradation: empirical evidence from economic cooperation organization countries. PAKISTAN ISLAMICUS (An International Journal of Islamic & Social Sciences), 3(2), 310-334.
Wang, Q., Zhang, F., & Li, R. (2023). Revisiting the environmental kuznets curve hypothesis in 208 counties: The roles of trade openness, human capital, renewable energy and natural resource rent. Environmental Research, 216, 114637.
Wei, S., Wen, J., & Saleem, H. (2026). The financial technological innovation, renewable energy innovation and the resource rents-institutional quality nexus: a paradigm shift in economic growth and sustainable development in G7 economies. Frontiers in Environmental Science.
Wen, Y., Shu, R., Gao, C., & Yan, S. (2024). Assessing the synergistic effect of “pollution and carbon reduction” and “economic growth”: a perspective from bilateral trade between China and RECP countries. Frontiers in Environmental Science, 12, 1415808.
Wu, Z., Adebayo, T. S., & Alola, A. A. (2024). Renewable energy intensity and efficiency of fossil energy fuels in the nordics: How environmentally efficient is the energy mix?. Journal of cleaner production, 438, 140711.
Zafar, S., Akhter, T., Ahmed, A., & Ullah, I. (2026). The Green Technological Innovation-Renewable Energy-Carbon Nexus in the Big Four Emerging Economies: Evidence from Fixed-Effects Model with Driscoll–Kraay Standard Errors. Journal of Asian Development Studies, 15(2), 180-190.
Zafar, S., Ullah, I., Khan, K. S., & Khattak, H. (2025). Artificial Intelligence Patents and Economic Growth: A Growth Framework for OECD Countries. Journal of Asian Development Studies, 14(4), 35-44.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Aqeel Ahmed, Asia Batool, Feroze Ali, Muhammad Hammad Javed
This work is licensed under a Creative Commons Attribution 4.0 International License.
Under the Creative Common Attribution (CC-BY 4.0) license, authors retain copyright and grant the journal right of first publication.
