Exploring the Regime Dependent Impacts of Renewable Energy, Growth, and Population on Inclusive Wealth

ABSTRACT Indeed, inclusive wealth is crucial for any country to achieve the sustainability of its economic development by considering human capital. For this, the current paper intends to explore how renewable energy consumption and economic growth impact and interact with each other under the inclusive wealth approach. By integrating physical, human, and natural capital, we provide a comprehensive analysis of how energy use influences sustainable development. The study utilized the data from 118 countries ranging from 1990 to 2018. For accomplishment of the study objectives, the novel methodology of Panel Smooth Transition Regression (PSTR) has been used. Additionally, we develop projections for the years 2019 to 2050 and analyze the future relationship between inclusive wealth and sustainable development. The findings of the threshold regression approach indicate that the nexus between renewable energy consumption and inclusive wealth is positive up to a certain threshold (4.33%); however, beyond this threshold and in higher regimes of inclusive wealth, the relationship remains positive and becomes stronger. The projection analysis until 2050 highlights the necessity for progressive resilience strategies in response to the evolving relationship between inclusive wealth and sustainable development. This study underscores the need for policymakers to prioritize the integration of renewable energy in inclusive wealth frameworks, aiding in the effective achievement of sustainable development goals.