Energy, Environment, and Policy in G20 Countries: Modeling the N-Shaped EKC with Renewable Energy, Fossil Fuels, Nuclear Energy, and R&D Investment

Abstract

This study examines the effects of Gross Domestic Product (GDP) per capita, its squared and cubic terms (GDP2 and GDP3), renewable energy, fossil fuels, nuclear energy, and research and development (R&D) on environmental sustainability in G20 countries from 1994 to 2023, with a specific focus on testing the N-shaped Environmental Kuznets Curve (EKC) hypothesis. CS-ARDL serves as the baseline estimator, and robustness is checked using FMOLS and DOLS estimators and an alternative dependent variable, greenhouse gas (GHG) emissions. The coefficients of GDP, GDP2, and GDP3 follow the expected +, −, + pattern of a cubic specification, indicating nonlinear income–environment dynamics. However, the implied turning points are not observed within the sample range, suggesting that a full N-shaped EKC trajectory is not empirically supported for G20 countries. Renewable energy consumption and R&D investment have negative coefficients, suggesting they help reduce environmental degradation. Fossil fuel consumption significantly increases ecological pressure, whereas nuclear energy shows a positive but insignificant effect. The findings remain robust across alternative estimators and when GHG emissions are used. Overall, the findings indicate that economic growth alone cannot ensure environmental sustainability, underscoring the need for renewable energy expansion, technological innovation, and reduced reliance on fossil fuels.