Advancing <scp>SDG</scp> 7 and <scp>SDG</scp> 13 Through Energy Efficiency: Evidence From Economic Complexity and Urbanization in <scp>G7</scp> Nations

ABSTRACT This study investigates the determinants of energy efficiency (EE) in the G7 countries over the period 2000–2022, focusing on the roles of economic growth (GDP), carbon emissions (CO 2 ), urban population growth (URB), and Economic Complexity Outlook Index (COI). Using a suite of advanced econometric techniques, including Method of Moments Quantile Regression (MMQR), Feasible Generalized Least Squares (FGLS), Panel‐Corrected Standard Errors (PCSE), and Driscoll–Kraay Standard Errors (DKSE), the analysis captures both cross‐country heterogeneity and long‐run equilibrium dynamics. The results reveal that GDP negatively affects EE, indicating that economic expansion continues to increase energy intensity across the G7. CO 2 emissions are positively associated with energy intensity, reflecting a persistent reliance on fossil fuels that undermines efficiency. Conversely, urbanization enhances EE, particularly in countries with advanced infrastructure and smart energy systems. Economic complexity exerts a generally positive but uneven influence, suggesting that more diversified and technology‐oriented economies achieve stronger efficiency gains. These results highlight the need of achieving a balance between promoting economic growth and utilizing sustainable energy sources. Supporting long‐term economic and environmental resilience, the study offers practical insights for achieving Sustainable Development Goals 7 (Clean Energy) and 13 (Climate Action) through the promotion of policies driven by innovation, low‐carbon technology, and energy‐efficient urban infrastructure.