Does energy intensity correlate with economic growth and government governance?

Abstract

This study examines the relationship between energy intensity, economic growth, and government governance. The estimated number of countries is 182 countries, divided into three groups, namely high-income countries, middle-income countries, and low-income countries. The variables studied are energy intensity, renewable energy consumption, economic growth and government governance. Government governance is measured by government effectiveness and regulatory quality. Data is processed through correlation and comparison analysis. Research findings show that energy intensity during the pandemic was higher than in 2019, even though economic growth experienced a contraction on average. Based on country groups, there are significant differences in energy utilization where high-income countries are more efficient in energy use than other groups as indicated by a significance value <0.05. In general, energy intensity is positively correlated with economic growth, and negatively with government governance as indicated by a significance value of <0.01. The correlation between energy intensity and economic growth is in the low category with a correlation value of 0.19, while the correlation between energy intensity and government governance is in the moderate category with a correlation value of -.41 for government effectiveness, and -.42 for regulatory quality. The better the governance, the more efficient the use of a country’s energy. These findings recommend the importance of governance in encouraging energy efficiency efforts.