Roles of trilemma in the world energy sector and transition towards sustainable energy: A study of economic growth and the environment

Abstract

An energy trilemma addresses three often conflicting challenges: energy security, equitable access to energy, and environmental sustainability. Maintaining this balance in the context of rapid transitions to decentralized, decarbonized, and the digital system is challenging with the risk of trading off equally essential goals. This study examines the energy trilemma and the transition to sustainable energy in the top ten CO2-emitting countries in the world, using fixed asset investment and energy use as moderators from 1990 to 2016. The top ten CO2-emitting countries are China, the United States, India, Russia, Japan, Iran, Germany, South Korea, Saudi Arabia, and Indonesia. For the empirical analysis, we apply advanced econometric techniques. We found a trilemma in the world energy sector, and the transition to sustainable energy simultaneously enhances economic growth and environmental quality in the long-run. Energy trilemma, sustainable energy transition, investment in fixed assets, and energy use all contribute to economic growth. The energy trilemma is negatively correlated with environmental quality. Fixed asset investments and energy use are positively linked with environmental quality. In addition to enhancing economic growth, investments in fixed assets and energy use harm the environment. Policymakers in the top ten CO2-emitting nations should improve and integrate their energy policy actions to promote energy security, environmental strategies, mobilize investments that encourage technological innovation, facilitate clean energy transition that maximizes social and economic benefits that support environmental sustainability.