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<p>Energy efficiency is central to sustainable development, particularly following its inclusion in Sustainable Development Goal (SDG) 7. However, empirical evidence on the link between energy efficiency and CO₂ emissions remains limited and inconclusive. This study argues that the environmental impact of energy efficiency depends on a country’s level of human capital. Using a stochastic frontier approach, we construct a panel energy efficiency index for 75 developed and developing countries from 2000 to 2022. We then apply difference- and system-GMM estimation to examine how human capital moderates the energy efficiency-emissions relationship. The results show that human capital significantly strengthens the emission-reducing effect of energy efficiency. These outcomes remain robust using GDP per unit of energy use as an indicator of energy efficiency. Our empirical findings reveal a new channel through which human capital contributes to environmental sustainability.</p>

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Human capital, energy efficiency, and CO2 emissions: a reassessment of the environmental Kuznets curve

  • 期刊论文

  • 发表日期：

    2026年1月16日

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  • Muhammad Khan,
  • Arslan Tariq Rana

摘要

Energy efficiency is central to sustainable development, particularly following its inclusion in Sustainable Development Goal (SDG) 7. However, empirical evidence on the link between energy efficiency and CO₂ emissions remains limited and inconclusive. This study argues that the environmental impact of energy efficiency depends on a country’s level of human capital. Using a stochastic frontier approach, we construct a panel energy efficiency index for 75 developed and developing countries from 2000 to 2022. We then apply difference- and system-GMM estimation to examine how human capital moderates the energy efficiency-emissions relationship. The results show that human capital significantly strengthens the emission-reducing effect of energy efficiency. These outcomes remain robust using GDP per unit of energy use as an indicator of energy efficiency. Our empirical findings reveal a new channel through which human capital contributes to environmental sustainability.