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Economies
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Energy Consumption, Financial Development and Economic Growth
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Energy Consumption, Financial Development and Economic Growth

A special issue of Economies (ISSN 2227-7099).

Deadline for manuscript submissions: 30 September 2026 | Viewed by 10011

Special Issue Editors

Dr. Bartosz Jóźwik

E-Mail Website
Guest Editor
Institute of Economics and Finance, The John Paul II Catholic University of Lublin, 20-950 Lublin, Poland
Interests: economics of integration and economic growth; energy consumption and environmental sustainability; green finance and sustainable development; Central and Eastern European economies; European economic integration; international policy coordination and economic transition; economic development
Prof. Dr. Mesut Doğan

E-Mail Website
Guest Editor
Vocational School of Bozuyuk, Bilecik Seyh Edebali University, 11300 Bilecik, Turkey
Interests: banking and finance; finance; money, capital and financial institutions; financial markets and investment management; energy; environmental; energy economics

Special Issue Information

Dear Colleagues,

We are delighted to invite you to contribute to this Special Issue on “Energy Consumption, Financial Development and Economic Growth”, a timely and popular theme in current research. Its focus is on how financial development can facilitate renewable energy consumption and clean energy adoption, ultimately fostering sustainable economic growth. The scope encompasses the energy–growth nexus and green transition, with attention to environmental degradation and the environmental Kuznets curve, highlighting how market-based solutions can drive resilient development. The purpose is to offer fresh insights into how financing mechanisms mobilize resources for renewable energy, bridging theoretical perspectives with evidence-based policy implications. By engaging with the existing literature, we aim to deepen our collective knowledge and advance sustainable growth strategies.

We look forward to your contributions.

Dr. Bartosz Jóźwik
Prof. Dr. Mesut Doğan
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 250 words) can be sent to the Editorial Office for assessment.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a double-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Economies is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • renewable energy consumption
  • energy–growth nexus
  • environmental degradation
  • environmental Kuznets curve
  • financial development
  • clean energy
  • green transition
  • green growth
  • sustainable economic growth
  • green finance

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Published Papers (5 papers)

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Research

16 pages, 527 KB  
Article
Revisiting the EKC Hypothesis for Environmental Quality in BRICS Countries: The Role of Energy Risk Improvement
by Sardorbek Makhmudov, Nodir Jumaev, Ulugbek Urinboev, Zokir Mamadiyarov, Jurabek Kuralbaev, Feruz Kurbanov and Sitora Xasanova
Economies 2026, 14(5), 179; https://doi.org/10.3390/economies14050179 - 14 May 2026
Viewed by 332
Abstract
This study examines the impact of energy risk on environmental quality in BRICS economies (Brazil, Russia, India, China, and South Africa) from 2000 to 2024, including economic growth, renewable energy, institutional quality, urbanization and energy usage. Specifically, this study uses Fully Modified Ordinary [...] Read more.
This study examines the impact of energy risk on environmental quality in BRICS economies (Brazil, Russia, India, China, and South Africa) from 2000 to 2024, including economic growth, renewable energy, institutional quality, urbanization and energy usage. Specifically, this study uses Fully Modified Ordinary Least Squares (FMOLS) under the Environmental Kuznets Curve (EKC) hypothesis to estimate long-run relationships in countries, assessing robustness through Driscoll–Kraay Standard Errors to address heteroskedasticity, serial correlation, and cross-sectional dependence. The empirical findings provide strong support for the EKC hypothesis, as evidenced by the positive and significant coefficient of economic growth and the negative and significant coefficient of its squared term. Energy consumption and urbanization are found to significantly increase environmental degradation, indicating their substantial contribution to emissions. In contrast, renewable energy consumption significantly reduces emissions, highlighting its role in improving environmental sustainability. Importantly, energy risk does not exhibit a statistically significant impact on environmental quality, suggesting that energy security vulnerabilities have not directly translated into measurable environmental effects in the long run across BRICS countries. Institutional quality shows a positive and significant relationship with emissions, implying that governance improvements alone have not yet effectively supported environmental sustainability and decarbonization efforts. Overall, the findings underscore the need for integrated policy frameworks that promote renewable energy adoption, manage urban expansion, and enhance the effectiveness of institutional mechanisms to achieve sustainable environmental outcomes in BRICS economies. Full article
(This article belongs to the Special Issue Energy Consumption, Financial Development and Economic Growth)
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30 pages, 939 KB  
Article
AI-Driven Financial Solutions for Climate Resilience and Geopolitical Risk Mitigation in Low- and Middle-Income Countries
by Abdelrahman Mohamed Mohamed Saeed and Muhammad Ali
Economies 2026, 14(4), 134; https://doi.org/10.3390/economies14040134 - 10 Apr 2026
Viewed by 1027
Abstract
Climate change disproportionately threatens low- and middle-income countries, yet integrated assessments combining socio-economic fragility with physical hazards remain limited. This study quantifies multi-dimensional climate vulnerability and derives optimized adaptation policies for six representative nations (Bangladesh, Colombia, Kenya, Morocco, Pakistan, Vietnam) by fusing socio-economic [...] Read more.
Climate change disproportionately threatens low- and middle-income countries, yet integrated assessments combining socio-economic fragility with physical hazards remain limited. This study quantifies multi-dimensional climate vulnerability and derives optimized adaptation policies for six representative nations (Bangladesh, Colombia, Kenya, Morocco, Pakistan, Vietnam) by fusing socio-economic indicators with climate risk data (2000–2024). A computational framework integrating unsupervised learning, dimensionality reduction, and predictive modeling was employed. Principal Component Analysis synthesized eight indicators into a Compound Vulnerability Score (CVS), while K-Means and DBSCAN identified distinct vulnerability regimes. XGBoost quantified driver importance, and Graph Neural Networks captured systemic interconnections. XGBoost identified projected drought risk (31.2%), precipitation change (18.1%), and poverty headcount (14.3%) as primary drivers. Graph networks demonstrated significant risk amplification in African nations (Morocco SRS: 0.728–0.874; Kenya SRS: 0.504–0.641) versus damping in Asian countries. A Reinforcement Learning (RL) agent was trained using Deep Q-Networks with experience replay to optimize intervention portfolios under budget constraints. The RL policy achieved a 23% reduction in systemic risk compared to uniform allocation baselines, generating context-specific priorities: drought management for Morocco (score 50) and Pakistan (40); poverty alleviation for Kenya (40); coastal protection for Bangladesh (40); agricultural resilience for Vietnam (35); and institutional capacity building for Colombia (50). In conclusion, socio-economic fragility non-linearly amplifies climate hazards, with poverty and drought risk constituting critical vulnerability multipliers. The AI-driven framework demonstrates that targeted interventions in high-sensitivity systems maximize systemic risk reduction. This integrated approach provides a replicable, evidence-based foundation for strategic adaptation finance allocation in an increasingly uncertain climate future. Full article
(This article belongs to the Special Issue Energy Consumption, Financial Development and Economic Growth)
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32 pages, 819 KB  
Article
Institutional Effectiveness and the Structural Determinants of Environmental Efficiency in South Asian Economies
by Artikov Beruniy, Yuldoshboy Sobirov, Jurabek Kuralbaev, Samariddin Makhmudov, Ziyat Kurbanov, Feruz Kurbanov and Zebiniso Navruz-Zoda
Economies 2026, 14(4), 108; https://doi.org/10.3390/economies14040108 - 27 Mar 2026
Viewed by 860
Abstract
This study investigates the moderating role of government effectiveness in the relationship between urbanization, renewable energy adoption, and environmental efficiency in South Asia over the period 1996–2023. Using a dynamic panel life-cycle framework and advanced long-run estimators (FMOLS, DOLS, CCR) complemented by robust [...] Read more.
This study investigates the moderating role of government effectiveness in the relationship between urbanization, renewable energy adoption, and environmental efficiency in South Asia over the period 1996–2023. Using a dynamic panel life-cycle framework and advanced long-run estimators (FMOLS, DOLS, CCR) complemented by robust corrections for cross-sectional dependence and heteroskedasticity, the analysis reveals that economic growth and trade expansion increase environmental pressures, while renewable energy deployment, industrial modernization, and effective governance significantly reduce CO2 emissions. Notably, the interaction between renewable energy and government effectiveness demonstrates that institutional quality amplifies the mitigation impact of clean energy policies. These findings highlight that environmental outcomes are structurally and institutionally conditioned, emphasizing the importance of governance-contingent strategies for achieving sustainable urbanization and low-carbon development. The study contributes to the literature by integrating governance as a moderating mechanism in the urbanization–environment nexus and providing policy-relevant evidence for sustainability interventions in the region. Full article
(This article belongs to the Special Issue Energy Consumption, Financial Development and Economic Growth)
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30 pages, 487 KB  
Article
The Relationship Between Financial Development, Energy Consumption, Economic Growth, and Environmental Degradation: A Comparison of G7 and E7 Countries
by Arzu Özmerdivanlı and Yahya Sönmez
Economies 2025, 13(10), 278; https://doi.org/10.3390/economies13100278 - 25 Sep 2025
Cited by 6 | Viewed by 2351
Abstract
Both developed and developing countries increased their energy consumption while continuing to advance economically and financially. In parallel with increasing energy use, the intensification of anthropogenic activities has led to higher greenhouse gas emissions, exposing countries to the challenges of climate change and [...] Read more.
Both developed and developing countries increased their energy consumption while continuing to advance economically and financially. In parallel with increasing energy use, the intensification of anthropogenic activities has led to higher greenhouse gas emissions, exposing countries to the challenges of climate change and global warming. The environmental degradation resulting from rapid growth in both developed and emerging economies has drawn the interest of scholars, policymakers, and environmental advocates. This study aims to address the relationships between financial development, economic growth, energy consumption, and environmental degradation in G7 and E7 countries. Within this framework, panel cointegration and causality analyses were conducted using annual data from the period between 2000 and 2021 for the relevant countries. The results of the cointegration analysis indicate that the variables move together in the long run in both groups of countries. Furthermore, the long-term relationship coefficients reveal that economic growth and energy consumption contribute to environmental degradation in both G7 and E7 nations. Moreover, the results show that, unlike in E7 countries, financial development in G7 countries exacerbates environmental degradation, while trade openness mitigates it. Panel causality analysis reveals that in E7 countries, changes in financial development influence CO2 emissions, and variations in CO2 emissions, in turn, affect economic growth and trade openness. In G7 countries, the analysis results indicate a bidirectional causal relationship between trade openness and CO2 emissions across the panel. The panel cointegration and causality analyses yield differing results at the country level. Given these findings, it can be recommended that both G7 and E7 countries transition from fossil fuel sources to clean energy sources in conducting economic activities, promote green economy initiatives, and expand the use of green finance instruments to mitigate environmental degradation. Full article
(This article belongs to the Special Issue Energy Consumption, Financial Development and Economic Growth)
21 pages, 2829 KB  
Article
Energy Efficiency, Consumption, and Economic Growth: A Causal Analysis in the South African Economy
by Enock Gava, Molepa Seabela and Kanayo Ogujiuba
Economies 2025, 13(5), 118; https://doi.org/10.3390/economies13050118 - 23 Apr 2025
Cited by 7 | Viewed by 4399
Abstract
Energy efficiency potentially reduces global carbon emissions, whereas the need of emerging countries to maintain economic growth and development entails a sharp increase in energy consumption. However, to meet this, current energy systems need to be transformed. Several studies find different conclusions on [...] Read more.
Energy efficiency potentially reduces global carbon emissions, whereas the need of emerging countries to maintain economic growth and development entails a sharp increase in energy consumption. However, to meet this, current energy systems need to be transformed. Several studies find different conclusions on the short-run and long-run relationship and the direction of causality, and none of the studies have considered energy efficiency in their model. This study investigates the direction of causality between energy efficiency, energy consumption, and economic growth in South Africa. To determine if a long-run relationship between the variables exists, the Johanson cointegration test is used, and the results indicate that there is a long-run relationship between economic growth, energy depletion, energy efficiency, non-renewable energy consumption, renewable energy consumption, and energy security, with trace statistics suggesting that the null hypothesis of no cointegration should be rejected at a 5% level of significance. The Toda and Yamamoto procedure of the Granger causality approach was then applied. This study finds a unidirectional causality between energy efficiency, non-renewable energy consumption, and economic growth and no causality between renewable energy consumption, energy depletion, energy security, and economic growth. The growth hypothesis is supported, while the neutrality hypothesis is only confirmed regarding renewable energy consumption and economic growth. The results further suggest that a unidirectional Granger causality exists between non-renewable consumption and energy efficiency, and economic growth in South Africa. In South Africa, energy efficiency is a significant tool to enhance sustainable growth and attain climate objectives. Also, energy efficiency helps to lower the costs of mitigating carbon emissions and further advance both social and economic development. Full article
(This article belongs to the Special Issue Energy Consumption, Financial Development and Economic Growth)
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