*The Review of Literature*

Research is conducted to evaluate the correlation between environmental issues and macroeconomic variables in recent decades. Numerous studies regarding this issue reviewed to verify the influence of energy usage and economic upswing on the developing economies' ecological disorder. Most of the studies focused on a panel of mixed-income nations such as upper income, middle-income, and lower-middle-income; few studies focused on regions such as the Association of Southeast Asian Nations (ASEAN) [13], Organization for Economic Co-operation and Development (OECD), and Organization of the Petroleum Exporting Countries (OPEC) [14]. In contrast, the panel of developing nations from the overall world was also a part of this literature [15], while Ref. [16] verified EKC was part of the developing one belt one road initiative. This literature review showed that energy usage and economic upswing positively correlate with the ecological disorder [17].

The Environmental Kuznets Curve hypothesis asserts a definite link among population growth, GDP, energy usage, and carbon emission. The positive association among these variables verified a specific rise in carbon dioxide emission when economies are developing. As the developing economies are in the development phase, EKC's presence witnessed and confirmed the constructive outcome of an economic upswing on the ecological disorder [18]. The authors [19] also proved the existence of the EKC hypothesis in thirteen nations by analyzing the association of eighteen economic indicators and ecological disorder. Moreover, population growth and economic uncertainty provide an essential answer to all the aforementioned variables for environmental depletion [20].

The authors of [21] verified the EKC theory's occurrence and demonstrated a negative effect of renewable energy on the environment. For the possible occurrence of EKC, environmental efficiency is very vital. It could be attained through energy efficiency, energy pricing, energy intensity, technological innovation, or building high-tech industries. The authors of [22] investigated the role of efficiency growth and convergence to enhance economic productivity using inputs and embrace technologies in 104 countries for a thirty-six-year dataset. This study found that environmental efficiency improved approximately 1.3 percent globally due to energy pricing, restructuring industrial setup, or globalization. The authors of [23] suggested that energy transactions can help to enhance economic and environmental efficiency. The transaction of energy in the different income level nations is different, which may change EKC's pattern or speed. The authors of [24] found that even global crises such as COVID-19 have changed the entire energy pricing mechanism and lead to the collapse of the energy market and the

competitiveness of renewable energy projects. Likewise, to view the EKC occurrence, the technological innovations in emission reduction and carbon transfer strategies based on the low carbon preference are deemed necessary. Ref. [25] suggested that low carbon preference can be an excellent source to improve environmental conditions without compromising economic growth. Some of the researchers attempted to verify the notion of EKC through capital formation. For example, Ref. [26] found that capital formation is a source of environmental degradation in G-7 countries. Therefore, the role of energy consumption, fossil fuel or renewable energy preferences, energy innovations to enhance the energy efficiency, or reduce its intensity, innovations for high-tech industrialization are a few core indicators to decide EKC's time and speed.

The existing literature is divided into two different aspects. Many attempted to view the EKC occurrence in developing or developed. For example, Ref. [27–29] analyzed the EKC theory without considering EKC's trajectory in routine or emergency conditions. Other studies like [30–32] attempted to measure the economic, energy, and environmental efficiency via indexing the variables of said field. These studies did nothing for EKC theory and its speed of occurrence.

In conclusion, some studies presented the assenting linkages of an economic upswing with carbon emission, while others delivered a negative association between these variables. The same is the case for energy, carbon emission, and economic upswing. Much of the research work evidenced the EKC hypothesis and established a panel of developed and developing economies. However, only a few have tried to fix the three-dimensional energy effect on economic growth and environmental stress. Moreover, the EKC literature focused on GDP and the conversion of GDP square term but not considering the other variables, such as capital formation, growth rate, and renewable energy consumption. Although these two also have an independent effect on economic growth and environmental condition, they can play an essential role in EKC trajectory and speed. Some other studies attempted to measure energy efficiency in economic cost and environment [33,34]. However, they did not explain EKC to view the real impact of energy efficiency on economic growth and the environment. Thus, there is a gap for some comprehensive studies in these areas, especially from developing nations of Asia. These nations are suffering much in terms of ecological disorder, energy usage, and sustainable economic growth. This research attempts to cover these two different concepts. This study attempts to fill the literature gap regarding energy efficiency as the source of the EKC trajectory. Here, the combined effect of energy, economic, and environment underlined developing economies' analysis to understand the EKC trajectory and speed. The study's efficiency score indicates the current condition of energy efficiency, energy intensity, and environmental efficiency of the individual country based on the last twenty-three years of progress to depict the gap of EKC among underline nations. Thus, lower-middle-income and upper-middle-income countries have been selected to view their respective economic and environmental conditions with energy efficiency as per world bank classification. Therefore, the current study has novelty because of its sole combination of variables, two different angels of analysis, and the selection of nations from the Asian region concerning their income levels. This study can help policymakers, and business individuals decide the course of EKC occurrence and its trajectory for preferring the supportive sources of renewable energy with high efficiency and low intensity in their respective countries.

#### **2. Materials and Methods**

A twenty-three-year panel dataset of fifteen developing economies of Asia was taken from 1990 to 2013. The primary source of this dataset is "World Development Indicators." This dataset has been divided into two income categories classified by World bank 2021. Here, Nepal, Bangladesh, India, Mongolia, Pakistan, Philippine, Vietnam, and Sri Lanka sorted out as lower-middle-income economies. At the same time, China, Iran, Jordan, Malaysia, Thailand, Turkey, and Indonesia are upper-middle-income economies [33]. This study is based on two different methods of research. First, the ARDL method of econometrics utilizes the EKC theory of environment and economic growth. Secondly, the DEA method of operational research to assess the energy efficiency of underline countries.

Table 1 depicts the detail of the indicators used for this study. Here, ecological disorder (END) is the dependent variable, while renewable energy (ENC), economic growth (EGW), the square of economic growth (EGW2), capital formation (FCF), and population growth (PG) are the independent variables.


**Table 1.** Variable description and source.
