Interconnections Between Economic Growth, Human, and Sustainable Development: Implications for Carbon Intensity Reduction in Upper‐Middle and High‐Income Countries

ABSTRACT Environmental sustainability constitutes a foundational prerequisite for sustained economic growth and social well‐being; however, rising carbon emissions remain a pressing global concern. Despite substantial engagement with the Environmental Kuznets Curve (EKC) hypothesis, existing literature inadequately addresses the roles of human and sustainable development in shaping carbon intensity trajectories. This study investigates the non‐linear effects of economic growth, human development, and sustainable development on carbon intensity across 77 upper‐middle and high‐income economies over the period 1990–2023. Employing Panel Quantile Regression (PQR) and Instrumental Variable Two‐Stage Least Squares (IV‐2SLS) estimation augmented with winsorized approaches to address heterogeneity and endogeneity. The findings reveal a U‐shaped relationship under PQR, while IV‐2SLS supports the conventional inverted‐U EKC. Both human and sustainable development indices exhibit inverted U‐shaped associations with carbon intensity. These results underscore that environmental outcomes are contingent upon broader developmental processes beyond economic expansion alone, offering critical policy guidance for accelerating low‐carbon transitions in upper‐middle and higher income economies.