Sustainable Energy Transition, Energy Efficiency and Labor Market Dynamics: An Empirical Assessment of SDG 7 and SDG 8

As the global shift toward cleaner energy accelerates, a critical question emerges: can sustainable energy transition foster decent employment or does it generate new labour market frictions? This study investigates how renewable energy transition and energy efficiency shape labour market dynamics across the BRICS economies, using a balanced panel of five countries from 2000–2023. The analysis integrates a composite Renewable Energy Transition Index (constructed via PCA), energy intensity and multidimensional institutional and demographic controls. A multi-method empirical strategy—fixed effects, two-stage least squares and method-of-moments quantile regression, captures both average and distributional effects, complemented by pre-/post-COVID-19 estimations to assess whether the pandemic altered the underlying relationships. The findings reveal that energy efficiency consistently enhances labour market outcomes, with this effect strengthening in the post-COVID period. By contrast, renewable energy transition exerts heterogeneous and often adverse short-run impacts, particularly in weaker labour markets and in the full BRICS configuration, where Russia’s inclusion amplifies transition frictions. Education and governance mitigate some of these effects, with human capital providing the most stable moderating channel. Country-specific patterns show strong energy–labour linkages in Brazil and China, muted responses in India, persistent demographic pressures in South Africa and a significant bloc-level influence of Russia. By embedding SDG 7 and SDG 8 within a unified analytical framework and incorporating pandemic-related dynamics, this study offers novel evidence on how clean energy pathways interact with labour structures in emerging economies. The results highlight the importance of skills development, institutional capability and context-sensitive policy sequencing for aligning sustainable energy transition with inclusive and resilient labour markets.