Investigating the Energy Environmental Kuznets Curve Hypothesis Considering Energy Security

Purpose - This study investigated the Energy-Environmental Kuznets Curve (EEKC) hypothesis with a focus on energy security. The main purpose of this study is to verify the validity of EEKC and emphasize the importance of the relationship between energy security and sustainability. Design/Methodology/Approach - In this study, panel data analysis was conducted on 40 countries (22 OECD countries and 18 non-OECD countries) from 2000 to 2019. In particular, ridge regression analysis was applied to address multi-collinearity among explanatory variables. Findings - First, this study emphasized that the level of income and the type of energy consumption by country are important factors in the validity of the EEKC hypothesis. Second, for OECD countries, there was a U-shaped relationship between total energy consumption and petroleum consumption with economic growth, while for non-OECD countries, a U-shaped relationship was observed in natural gas and electricity consumption. Third, the improvement of the energy security index for both total and non-OECD countries resulted in a decrease in energy consumption, whereas for OECD countries, the positive effects of the energy security index were limited to total energy consumption and petroleum consumption. Research Implications - While regulations and policies for controlling CO2 emissions are important, more proactive policies for energy consumption, which can be considered a more fundamental cause of environmental pollution, are needed. In addition, harmonious policies for energy security and sustainable development should be supported.