The effects of renewable and nonrenewable energy consumption on the ecological footprint: the role of environmental policy in BRICS countries

Linking clean energy consumption, globalization, and financial development to the ecological footprint in a developing country: Insights from the novel dynamic ARDL simulation techniques

Developing countries have been facing economic difficulties for over three and a half decades due to numerous factors, including fossil fuel consumption and dwindling biocapacity. It is necessary to pinpoint the factors that may be culpable for poor environmental quality leading to a rising ecological footprint (EFP). This study explores the effect of clean energy, financial development (FDV), and globalization on the EFP in a developing country using the novel dynamic ARDL simulation techniques and the bootstrap causality test. The findings suggest that green energy has no meaningful impact on the EFP. Globalization and FDV significantly reduce the EFP by 0.25% and 0.08%, respectively. Besides, the findings confirm the existence of the EKC hypothesis. Furthermore, the causality results affirm a unidirectional causality from globalization and FDV to EFP, while economic growth drives globalization. Also, a one-way causality flows from globalization to FDV, just as FDV Granger causes green energy. In line with the findings, the study recommends that public policies focus on funding environmental-friendly technologies and green innovations. The funding must be on recently developed energy-saving technologies that can ensure complementarity between increased economic growth and environmental deterioration.

Determinants of ecological footprint in European countries: Fresh insight from Bayesian model averaging for panel data analysis

This study examines the determinants of the ecological footprint of production in European countries from 1992 to 2020. Using partial and semipartial correlation analyses and Bayesian Model Averaging (BMA) approach for the first time, the research identifies key variables affecting ecological footprint. Using Bayesian methods, posterior inclusion probabilities (PIPs) were calculated for each variable's coefficient estimates, revealing their relative importance. Biocapacity, energy consumption, industrialization, financial development, life expectancy, and globalization displayed notably high PIPs, indicating their strong influence on the ecological footprint. In addition, the study employs cointegration tests to examine the long-run relationship between ecological footprint and explanatory variables. The results indicate significant cointegration between these variables across panels, supported by various test statistics. In the Weighted Pooled DOLS estimation, biocapacity, energy consumption, and life expectancy significantly influence the ecological footprint, while industrialization, financial development, and globalization exert a comparatively smaller impact. Researchers and policymakers should consider these determinants for effective sustainable development planning. These findings underscore the intricate interplay of factors shaping the ecological footprint and offer insights for effective policy interventions towards sustainable development.

Foreign investments and load capacity factor in BRICS: the moderating role of environmental policy stringency

This research examines whether environmental regulations have a moderating effect on the link between foreign direct investment and the environment, as well as the effect of foreign capital investments on environmental quality for BRICS nations. In this approach, using second-generation panel data methodologies for the period 1992-2020, the impacts of foreign direct investments, real national income, consumption of renewable energy, and environmental stringency index on the load capacity factor are explored in the base empirical model. In order to test if there is any evidence of a potential parabolic link between economic growth and environmental quality, the model also includes the square of real national income. In addition, in the robustness model, the moderating role of environmental policy on foreign investment and environmental quality is checked. Empirical results show a U-shaped association between environmental quality and economic development. The usage of renewable energy and the environmental stringency index is also shown to improve environmental quality, although foreign direct investments decrease it. Finally, it is determined that environmental regulations are effective in undoing the negative impacts of foreign capital investments on environmental quality, demonstrating the validity of their moderating function.

Disaggregated energy consumption, industrialization, total population, and ecological footprint nexus: evidence from the world's top 10 most populous countries

High population, energy consumption, industrialization, and environmental degradation are inherently linked, making the study of ecological footprints in the most populous countries crucial for understanding their environmental impact and guiding efforts to minimize ecological degradation through sustainable resource management and conservation. Therefore, this study examines the effects of disaggregated energy consumption, industrialization, and total population on the ecological footprint of the world's top 10 most populous countries namely Bangladesh, Brazil, China, India, Indonesia, Mexico, Nigeria, Pakistan, Russia, and the USA, using data for the period of 1990-2020. The research employs Kao and Pedroni techniques of cointegration to determine whether the variables are cointegrated in the long run. The long-term equilibrium association is measured utilizing panel autoregressive distributed lag/pooled mean group (ARDL/PMG), and method of moment quantile (MMQ) regression methods. Furthermore, to test for the causal relationships between the selected variables, we used the Dumitrescu and Hurlin (D-H) panel causality method. The findings of the study reveal that renewable energy consumption, as well as GDP square, have a significant negative influence on ecological footprint, implying that renewable energy and GDP square reduce ecological footprint and thus enhance environmental quality. Furthermore, non-renewable energy, industrialization, total population, and GDP have a detrimental impact on environmental quality by increasing ecological footprint. It is also found that there is a one-way causality from non-renewable energy and industrialization to ecological footprint and a bidirectional causal relationship between ecological footprint and total population, GDP, and GDP2. Important policy implications are drawn based on the findings.

Unraveling the non-linear impact of financial development on environmental sustainability: insights from developing countries agreeing the accord

This study delves into the intricate relationship between financial development and environmental sustainability by considering the role of the Paris Agreement in the context of developing countries. By employing advanced econometric techniques method of moment quantile regression (MMQR) and considering a period spanning from 1996 to 2021, this research unravels the non-linear impact of financial development on environmental degradation while considering population and GDP as control variables. The study reveals an inverted N-shaped relationship between financial development and environmental degradation, indicating that environmental degradation (ED) decreases as financial development increases. However, this is followed by a rise in ED before eventually witnessing a further decline. Additionally, the study highlights the positive correlation between GDP and population with ED across all quantiles, with a more pronounced impact observed in higher quantiles. Furthermore, the coefficient of the Paris Agreement demonstrates its effectiveness in decreasing environmental degradation, particularly at higher quantiles of ED. The findings of this study hold practical implications for policymakers, emphasizing the importance of designing and implementing coherent environmental and economic policies in developing countries. This study contributes to understanding the complex dynamics between financial development and environmental sustainability, offering valuable insights for fostering sustainable development pathways.

Exposing the environmental impacts of air transportation on the ecological system: empirical evidence from APEC countries

In the trend of globalization, economic and social benefits of air transportation (AIR) are not indisputable. However, AIR's environmental impacts are still a controversial issue. While previous studies had shown that air transportation contributed to air pollution by emitting CO2, lack of studies consider the effects of air transportation on ecological system. Therefore, this study investigates the relationship between air transportation and ecological footprint as well as CO2 emissions in the case of APEC countries, which is leading in the growth rate of air transport activities. Applying regression with Driscoll-Kraay standard errors for a data set from 1992 to 2015, our research provides evidence that: (i) air transportation increases CO2 emissions but this impact is negligible; (ii) air transportation contributes significantly in reducing ecological footprint of APEC countries; and (iii) globalization reduces both CO2 emissions and ecological footprint. In addition, Dumitrescu-Hurlin causality test helps to confirm the bidirectional causality relationship between air transportation and ecological footprint. Meanwhile, unidirectional causality runs from air transportation to carbon emissions. Based on these conclusions, some policy suggestions are given for APEC countries.

Renewable energy policy and deployment of renewable energy technologies: The role of resource curse

Due to the increasing emission of greenhouse gases and global warming, the development of renewable energy has become very important. The availability of fossil fuels and the low cost of their extraction compared to renewable energy projects reduce the motivation of countries, especially countries that have abundant natural resources, to develop this technology. Renewable energy deployment has become crucial in response to rising greenhouse gas emissions and global warming. Policies supporting renewable energy play a significant role in this. This study examines the effect of such policies on the deployment of renewable energy technologies, considering the role of natural resources. Two groups of countries were analysed: 20 oil developed countries and 20 oil developing countries. Given the availability of data and the achievement of balanced panels to evaluate short-term and long-term relationships between variables, in current research Data from 2010 to 2020 was used, and various panel data estimators such as Feasible Generalized Least Squares and Generalized Method of Moments were employed. The Quantile estimator was also used to assess the accuracy of the results. The findings suggest that renewable energy policies consistently lead to increased deployment of renewable energy technologies, regardless of a country's group. Of course, this positive effect is different according to the level of development in countries. Due to the higher efficiency of renewable energy policy, developed oil countries have more capacity to support renewable energy projects than oil developing countries. The abundance of natural resources in oil developed countries did not negatively impact renewable energy capacity, but in oil developing countries, the "resource curse" hindered the development of installed renewable energy.

Can green finance, green technologies, and environmental policy stringency leverage sustainability in China: evidence from quantile-ARDL estimation

Environmental sustainability is an umbrella approach depending on various climatic and economic policies. In doing so, the current study empirically evaluates the role of green finance, eco-innovation, and environmental policy stringency on the ecological footprint in China. To meet the objectives, the novel quantile autoregressive distributed lag (QARDL) approach was employed from 2000 to 2017. The outcomes reveal heterogeneous associations between the proposed variables. Manifestly, the QARDL estimation results demonstrate a positive impact between eco-innovation, green finance, and environmental policy stringency with the ecological footprints of China; however, the extent of the relationship is quantile dependent. The outcomes are further validated through the Wald test of parameter constancy. The bi-direction causality is observed among all variables at several quantiles. The current study offers policymakers helpful suggestions on enhancing the positive effects of environmentally supported innovation, green finance, and stringent environmental policies on the ecosystem.

Environmental regulations, political risk and consumption-based carbon emissions: Evidence from OECD economies

The staggering rise in global temperature and abrupt change of climate are the responses of nature alerting humanity to limit the emissions of hazardous gases and adopt environmentally-benign life style. The present study explores empirically whether any changes in environmental policy stringency (EPSI), political risk (PR), and the interaction term of EPSI*PR result in any alteration of consumption-based carbon emissions (CBCE) of the 24 advanced OECD economies over the period of 1990-2020. Prior to the empirical estimations, various diagnostic tests are employed. The empirical techniques include, panel cointegration check, Cross-sectional Augmented Autoregressive Distributed Lags (CS-ARDL), and Dumitrescu & Hurlin panel causality test. The findings confirm that imports, gross domestic product, and stringency of environment policies activate CBCE in short-run. Whereas, a unit improvement in political risk and its interaction with environmental policy stringency give rise to 0.231 MtCO₂ of CBCE in long run. Interestingly, the squared term of environmental policy stringency effectively tackles such emissions. Based on the findings, we conclude that the present environment related policies of OECD member states does not effectively limit CBCE. In order to achieve genuine emissions reduction goals, the selected nations should restructure their environment related policies by prioritizing increments in environmental policy stringency along with minimizing the risks involved in the political system.

The nexus between environmental regulation and ecological footprint in OECD countries: empirical evidence using panel quantile regression

Environmental regulation is an important tool for policymakers to achieve environmental goals. To better understand the role of environmental regulation in protecting the ecosystem, this paper offers a new perspective on exploring the heterogeneous impact of environmental policy stringency on the ecological footprint in 27 OECD countries during the period 1990-2015. An advanced economic method, panel quantile regression, is conducted to deal with the non-normality and unobserved individual heterogeneity across countries. The estimation outcomes indicate that the environmental effect of policy stringency is heterogeneous along the quantiles and different between the ecological footprint of consumption and production. The beneficial role of environmental regulation in reducing consumption ecological footprint is achieved at quantiles under 80th but the harmful effect starts occurring at extreme high quantiles. In contrast, environmental policy stringency plays a consistently useful role in mitigating production ecological footprint. In addition, the results disclose that the effects of other driving factors such as international trade, energy efficiency, renewable energy, and income are heterogeneous at different quantiles of ecological footprint. These findings help explain the inconsistencies in previous empirical studies on the nexus between environmental regulation and environmental quality in OECD countries. Finally, the current study gives policymakers useful recommendations on how to strengthen the beneficial impacts of environmental policies on the ecosystem.

Renewable and Non-Renewable Energy Consumption and Trade Policy: Do They Matter for Environmental Sustainability?

In the extant literature, there are numerous discussions on China’s environmental sustainability. However, few scholars have considered renewable energy consumption and trade policy simultaneously to debate environmental sustainability. Therefore, this paper attempts to examine how renewable and non-renewable energy consumption, bio-capacity, economic growth, and trade policy dynamically affect the ecological footprint (a proxy for environmental sustainability). Using the data from 1971 to 2017 and employing the auto-regressive distributed lag model to perform an empirical analysis, the results demonstrate that renewable energy consumption and trade policy are conducive to environmental sustainability because of their negative impacts on the ecological footprint. However, the results also indicate that bio-capacity, non-renewable energy consumption, and economic growth are putting increasing pressure on environmental sustainability due to their positive impacts on the ecological footprint. Moreover, to determine the direction of causality between the highlighted variables, the Yoda-Yamamoto causality test was conducted. The results suggest a two-way causal relationship between renewable energy consumption and ecological footprint, non-renewable energy consumption and ecological footprint, and economic growth and ecological footprint. Conversely, the results also suggest a one-way causal relationship running from bio-capacity and trade policy to the ecological footprint.

Modelling the effects of energy diversification on ecological footprint: evidence from Côte d'Ivoire

Energy diversification is a vital contribution to sustainable development. Many countries are accelerating the diversification of their energy mix to meet the challenges of the energy transition. This study aims to model and investigate the effects of energy diversification on the ecological footprint of production in Côte d'Ivoire. The study uses an autoregressive distributed lag model with structural breaks and covers the period 1971-2015. Energy diversification is measured by an "Energy Mix Concentration Index," a concentration indicator based on the Herfindahl-Hirschman Index. The results suggest that, in the short term, energy diversification reduces the ecological footprint of production in Côte d'Ivoire, and is conducive for environmental protection. In the long term, energy diversification also has a reducing effect on the ecological footprint of production up to a certain threshold where energy concentration increases the ecological footprint. The study finds that there is an optimal level of energy diversification that is ideal for achieving a lower impact of energy diversification activities and exploitation of energy production sources on the environment in Côte d'Ivoire. The commissioning of the Azito power plant in 1999, which produces electricity using natural gas, has also had a major impact, not only on the country's energy mix since then, but also on its ecological footprint of production.

Estimating per Capita Primary Energy Consumption Using a Novel Fractional Gray Bernoulli Model

Abstract: On the basis of the available gray models, a new fractional gray Bernoulli model (GFGBM (1,1,)) is proposed to predict the per capita primary energy consumption (PPEC) of major economies in the world [...]

Does energy efficiency improve environmental quality in BRICS countries? Empirical evidence using dynamic panels with heterogeneous slopes

In a time of climate change, critically contributed by the increased global energy consumption, energy efficiency comes out as a critical factor in achieving sustainable growth for the countries. Given the fast economic advancement in the BRICS (Brazil, Russia, India, China, and South Africa) countries that have played a vital role in the global economy, energy usage, and climate governance, this study investigates the role of energy efficiency on the environmental quality of these countries. We proxy environmental quality with CO₂ emissions, incorporate renewable energy in our models, and estimate the relationship with a long-panel data of 29 years (1990-2018). Our dynamic heterogeneous panel model findings confirm that energy efficiency significantly reduces CO₂ emissions or improves environmental quality in the long run and the short run. Besides, we find that renewable energy has a crucial role in enhancing environmental quality in the long run with the negative impact of economic growth activities. Our findings contribute to the literature in a novel way facilitating the comprehension of the role of energy efficiency using a wide range of sophisticated techniques, thus providing robust results. For the policymakers, we humbly advocate strategies for the clean and sustainable economic transition based on our findings which has notable implications for the BRICS, other developing economies, and the world as a whole.

Environmental policy stringency and comparative advantage of environmental sensitive goods: a study of textile exports in G20 countries

Purpose

Textile, listed as one of the highly environmentally sensitive goods, its trade is susceptible to be influenced by the implementation of stringent environmental policies. This paper aims to investigate the long-run relationship between revealed comparative advantage (RCA) and Environmental Policy Stringency Index (EPSI) for textile exports of G20 countries in panel data setup.

Design/methodology/approach

Apart from trend analysis, the authors have employed Pedroni and Westerlund panel cointegration method and fully modified ordinary least square (FMOLS) method to study the long-run relationship between RCA and EPSI in presence of cross-sectional dependence.

Findings

A strong link between trade and environmental stringency is observed for textile in the present study. For G20 countries, slight evidence of the Pollution Haven Hypothesis has also been witnessed in the study. Correspondingly, the results reveal the presence of long-run association between the variables under study, implying that stringent environmental policies reduce RCA for some countries, whereas some countries witness the Porter hypothesis.

Research limitations/implications

The results imply that policy formulation should not aim at limiting the efforts of connecting RCA to environmental stringency but to set trade policies in a wider framework, considering environmental concerns, as these are inseparable subjects. However, this study also provides relevant real-world implications that can support further research.

Practical implications

The present study has important implications for textile exporters such as green innovations. The Porter hypothesis can be a beneficial tool for G20 exporters in enhancing their export performance, especially for the ones dealing in environmentally sensitive goods. This study offers relevant policy implications and provides directions for future research on global trade and environment nexus.

Originality/value

This study deals in a debatable area of research that evaluates the interlinkages between environmental stringency and global trade flows in the G20 countries. An important observation of the study is the asymmetrical nature of policy stringency across different countries and its impact on trade. The unavailability of updated data is the limitation of the present study.