Assessing the heterogeneous impacts of energy consumption on human development of G7 by employing advanced quantile panel data estimation

Abstract

Modern social and economic organization forms have increasingly expanded energy usage, and these shifts in energy consumption have had a major impact on human development across the globe. The important question the current study addresses is assessing the heterogeneous effects of energy consumption (renewable and non-renewable) on the human development of the Group of Seven countries during 1991–2015 by applying a novel method of moments panel quantile regression. Interestingly, the most striking finding of the current study reveals that the impacts of renewable and non-renewable energy consumption on the human development index are diverse at different quantiles. The influence of renewable energy consumption is heterogeneous and significantly positive at different quantiles, with the lowest quantiles having the strongest impact and the highest quantiles having the least impact. Besides, the impact of non-renewable energy consumption is also heterogeneous on the human development index. The effect of non-renewable energy consumption is significantly negative for all the quantiles, with the size of the negative effect getting bigger for higher quantiles. In addition, our results show that renewable and non-renewable have a bidirectional causal relationship with the human development index. These novel findings will assist government officials as well as policymakers in better understanding how energy consumption influences human development.