What Drives Energy Efficiency in the <scp>G20</scp> ? Evidence From Finance, Education, and Sustainable Development

ABSTRACT Enhancing energy efficiency is critical for reducing carbon emissions, improving energy security, and advancing progress toward the Sustainable Development Goals (SDGs). Yet, the underlying drivers of energy efficiency in large and diverse economies remain underexplored. This study investigates the determinants of energy efficiency across G20 countries from 2000 to 2022, emphasizing the roles of finance, education, inequality, and economic growth. Using the Method of Moments Quantile Regression (MMQR), we capture heterogeneous effects across different levels of energy efficiency performance. Results reveal that electricity consumption and financial inclusion significantly enhance efficiency, particularly in higher‐performing economies, suggesting that electrification and inclusive access to digital financial services support more sustainable energy use. Conversely, financial depth, public education expenditure, and socio‐economic disparities exert adverse effects at upper quantiles, reflecting inefficiencies associated with credit misallocation, institutional energy use, and unequal access to resources. Economic growth demonstrates a non‐linear impact, underscoring the importance of structural reforms to decouple productivity gains from energy demand. Robustness checks using Dynamic Ordinary Least Squares (DOLS), Fully Modified Ordinary Least Squares (FMOLS), and the Generalized Method of Moments (GMM) confirm the stability of the findings. The study highlights the need for integrated policies that combine energy efficiency with inclusive finance, equitable education strategies, and targeted social measures, thereby contributing to SDGs 7 (Affordable and Clean Energy), 8 (Decent Work and Economic Growth), 9 (Industry, Innovation and Infrastructure), 10 (Reduced Inequalities), and 13 (Climate Action).