The Effect of Sustainability Drivers on Economic Growth in G20 Countries: A Quantile Regression Approach

This study investigates the distributional linkages between core sustainability indicators and economic growth across G20 economies from 2000 to 2024. Employing second-generation panel econometric techniques that account for cross-sectional dependence and slope heterogeneity, we implement the Method of Moments Quantile Regression (MMQR) alongside a Feasible Generalized Least Squares (FGLS) baseline. The results obtained empirically show that Energy Intensity exhibits a positive marginal association with annual real GDP per capita growth that increases continuously up to the upper quantiles (0.537 to 0.968 percentage points), which is due to the dominance of production scale of industry during periods of fast economic development. In contrast, Per Capita CO2 Emissions have an increasing negative impact on growth from median up to upper quantiles (−0.220 to −0.397 percentage points), which underlines the growing economic costs of environmental damage. Access to Electricity has regime-specific relevance and has statistically significant positive contribution to growth only in moderate and high growth regimes. Renewable Energy Consumption (REC) has a positive marginal impact on growth in low growth regimes (0.084 percentage points at τ = 0.05), while its marginal contribution diminishes and becomes statistically insignificant in the upper quantiles. These distributional asymmetries demonstrate that uniform macroeconomic strategies are inadequate, underscoring the necessity of regime-targeted sustainability policies across the G20.