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Energy is essential to achieving economic growth, yet the production of energy results in the emission of carbon dioxide, the primary factor in the deterioration of the environment and the acceleration of climate change. In this sense, the diversity of energy sources can contribute to achieving both environmentally sustainable development. This study investigates the relationship between energy diversification and economic growth in Nordic nations by employing a unique measure of energy diversity. The Nonlinear Panel Autoregressive Distributed Lag (NPARDL) approach is utilized in the research, and it looks at data from 1998 through 2018. According to our results, these nations experience favorable economic growth when there is an increase in the long-term diversity of their energy sources. However, in the near term, they have seen negative economic development due to the diversification of their energy sources. According to these findings, energy diversification benefits Nordic economic growth; however, further research is required for developing economies. As a result, further preventative actions must be implemented while simultaneously diversifying energy sources. [ABSTRACT FROM AUTHOR]