Revealing the essential and sufficient conditions for the energy consumption diversification

Abstract

To investigate the diversification of energy consumption in 65 countries during 2019, this study utilizes the Shannon-Wiener index (SWI), Necessary Condition Analysis (NCA), and Fuzzy Set Qualitative Comparative Analysis (FsQCA). According to the NCA model, all variables, except FSI, have the necessary conditions for the energy consumption diversification (ECD). The fsQCA model for high ECD identifies four adequate configurations that involve a combination of high human development, high green growth, global innovation, and either lower levels of urbanization or the presence of fragile states. One notable solution, with a consistency score of 93 %, is that a higher level of global innovation combined with lower levels of urbanization leads to higher ECD. Conversely, the model identifies three configurations sufficient for low ECD, which typically include higher levels of urbanization, fragile states, and lower levels of innovation and green growth. One of the most significant of these, with a consistency score of 81 %, is that increasing urbanization while decreasing green growth and global innovation leads to low ECD. According to the research findings, policymakers should strengthen the innovation ecosystem and focus on developing human capital to enhance energy diversity. Additionally, efforts should be made to combat corruption, stabilize governance, and improve oversight to ensure greater investment in clean energy.