Advancing Inclusive Sustainable Development Through Energy Efficiency and Renewable Energy: Evidence From the Nordic Region

ABSTRACT This study examines how energy efficiency, renewable energy consumption, income inequality, carbon emissions, industrialization, urbanization, and gross fixed capital formation are associated with welfare‐focused sustainable development in the Nordic region. The analysis covers Denmark, Finland, Iceland, Norway, and Sweden over 2000–2024 using a balanced panel of 125 observations. Adjusted net national income per capita is used as the dependent variable because it provides a welfare‐based measure that goes beyond GDP and is better suited to capturing long‐run development in this context. Drawing on Ecological Modernization and Endogenous Green Growth theories, the study applies quantile regression alongside Panel‐Corrected Standard Errors, Driscoll–Kraay estimators, and System‐GMM. The findings show that energy efficiency, renewable energy consumption, and industrialization are positively associated with sustainable development, while carbon emissions, income inequality, and gross fixed capital formation display mixed or negative relationships across the distribution. Urbanization is positive across much of the distribution but becomes weaker at higher levels of sustainable development. The results offer practical relevance for policymakers, energy regulators, municipal authorities, industrial planners, and public investment institutions seeking to advance inclusive and low‐carbon development.