Nonlinear Effects of Energy Shortages on Sustainable Development and Economic Growth: Evidence From South Asian Countries

ABSTRACT Reliable energy resources are indispensable for meeting growing human demand, and ensuring their sustainable use remains a critical global challenge in achieving the Sustainable Development Goals. This study delves into the linkage of energy shortage with key development indicators, including economic growth, human development index, and sustainable development index in the South Asian region. The empirical results are estimated through panel quantile regression and method of movement quantile regression approaches. The study found a U‐shaped relationship, indicating that initial electrification access has a limited impact on development, but after surpassing a certain threshold, further improvement of electrification access greatly accelerates social, environmental, and economic development. These results suggest the non‐existence of energy shortage in the South Asian region, as most of the population has already achieved electricity access. Furthermore, trade openness increases development, while urbanization and gross capital formation present mixed results. The findings suggest a need for policy to promote sustainable energy practices through renewable adoption, energy efficiency, and equitable energy distribution rather than mere access expansion. This research offers valuable insights for policymakers to formulate energy policies that support the region's balance of growth and environmental sustainability.