Economic Growth or Environmental Sustainability: Can We Have Both?: An Application in G7 Countries (1974-2023)

Aim: The study aims to investigate the balance between economic growth and environmental sustainability by examining how energy imports, CO₂ emissions, and fossil fuel consumption are influenced by various macroeconomic factors in G7 countries from 1974 to 2023.Method: The research employs panel data analysis covering the years 1974–2023 for G7 countries. The dependent variables are energy imports, carbon dioxide (CO₂) emissions, and fossil fuel consumption, while the independent variables include inflation, natural gas and oil rents, population growth, patent applications, foreign direct investment, market capitalization, exports, number of listed companies, and military expenditures.Results: The findings reveal a complex and multifaceted relationship between economic growth and environmental sustainability. Economic activity and energy consumption interact in ways that require careful policy attention, especially regarding carbon emissions and fossil fuel dependence.Conclusion: The study concludes that environmental policies should not be perceived as barriers to economic growth. On the contrary, when aligned with sustainable development goals, such policies can support long-term welfare. Promoting low-carbon energy sources and reducing fossil fuel dependency are highlighted as key strategies for achieving both economic and environmental objectives.