Fiscal policy and environment: a long-run multivariate empirical analysis of ecological footprint in Pakistan

Exploring the asymmetric effect of fiscal policy instruments in encountering environmental degradation: proposing an SDG framework for India

Asian countries are facing difficulties in attaining sustainable development goals (SDGs), and India is not an exception to it, with environmental degradation being one of the primary issues. Therefore, a policy-level reorientation may be required to address it. From this standpoint, fiscal policy instruments may come in handy towards fully integrating the SDGs into its agenda. The present investigation designs an SDG framework for India that could serve as an example for other Asian nations. This study introduces a new investigation exploring the relationship between fiscal policy instruments and environmental quality in India by examining the environmental Kuznets curve (EKC) hypothesis from 1990 to 2021. A nonlinear autoregressive distributed lag (NARDL) model is applied for empirical examination. The findings indicate that positive and negative shocks in fiscal policy instruments have significant impact on carbon emissions in both the long and short run. The study has also found evidence of an "inverted U-shape" EKC for India. These results are valuable from a policy perspective for India and other Asian countries to address environmental issues. The study has also outlined potential outcomes that may benefit India's fiscal policy in resolving environmental issues and attaining better economic growth. In the end, the study proposes a policy framework that supports SDG 7, SDG 8, SDG 12, SDG 13, and SDG 17 objectives.

Effects of macroprudential policies on ecological footprint: the moderating role of environmental policy stringency in the top 11 largest countries

This study investigates the impact of macroprudential policies on ecological footprint (EF) in the top 11 largest countries. This study uses country-level panel data from these countries, covering the period from 1992 to 2020. Findings indicate that macroprudential policies alleviates ecological footprint in the sample. Macroprudential policies primarily reduce the ecological footprint before medium quantile (50%) while the environmental benefits of the policies end in the later quantiles. Moreover, environmental policy stringency (EPS) amplifies the positive influence of macroprudential policies on environmental sustainability. Estimate results stay the same with basic regression results in the post-global financial crisis (GFC) period while the impact is positive in the pre-GFC period. Finally, other robust tests validate the findings reported in basic regression model. This study suggests that governments should customize various types of macroprudential policies while also considering environmental concerns. The achievement of a sustainable environment can be facilitated by the combined effects of macroprudential policies and EPS.

Exploring the impact of public funds and eco-friendly innovations on reducing carbon pollution in North Africa

The main objective of this study is to examine the impacts of green energy and public investment on the CO2 emissions in North Africa. Moreover, the study also tests the existence of the N-shaped Environmental Kuznets Curve (EKC) hypothesis for North African countries between 1995 and 2018. These factors were analyzed using the Dynamic Ordinary Least Squares (DOLS), Fully Modified Ordinary Least Squares (FMOLS), and Pooled Mean Group (PMG) estimators to obtain estimations of heterogeneous parameters. The outcome of these tests and examinations showed that the N-shaped curve was confirmed. Secondly, The results of the study also demonstrate the effectiveness of renewable energy as an eco-friendly innovation in reducing carbon emissions. This finding highlights the positive impact that renewable energy sources can have in terms of emitting fewer carbon emissions compared to traditional energy sources. Moreover, public investment, which interprets government expenditure, and urbanization contribute to environmental degradation by increasing CO2 emissions in the case of North African countries. Furthermore, the findings also indicated a trade-off effect resulting from the correlation between CO2 emissions and economic development. Based on these findings, the study recommends that economic policymakers in North African countries prioritize transforming the structure of government expenditures to improve environmental quality, optimize the utilization of revenues from non-environmentally friendly energy resources to accelerate the energy transition, increase the exploitation of renewable energy, and promote environmental awareness in society. By implementing these recommendations, North African countries can balance economic growth and environmental quality while reducing their carbon footprint.

Financial inclusion and environmental sustainability in Ghana: application of the dynamic ARDL estimator

Numerous explorations have been conducted on the determinants of Ghana's environmental quality. However, to the best of my knowledge, there has been no research on the connection between financial inclusion and environmental sustainability in the country. This study was therefore conducted to help fill that gap. In attaining the aforestated goal, econometric techniques that yield valid and reliable outcomes were engaged. From the results, all the series were first differenced stationary and cointegrated in the long run. The DARDL estimator with the support of the conventional ARDL estimator was adopted to explore the marginal effects of the predictors on the explained variable, and from the results, financial inclusion worsened environmental sustainability in the nation via high carbon emissions. Also, foreign direct investments degraded the country's ecological quality validating the pollution haven hypothesis. Finally, trade openness, population growth, and energy consumption were detrimental to environmental sustainability in the nation. On the causal directions amidst the series, unidirectional causalities from financial inclusion and trade openness to carbon effusions were disclosed. Also, feedback causalities between foreign direct investments and carbon emissions; between population growth and carbon effluents; and between energy consumption and carbon exudates were unfolded. The study recommended among others that, financial establishments should not fund the production of carbon-intensive goods, but those that are friendly to the environment. The government can also help to improve environmental sustainability by establishing regulations to mandate financial entities to engage in eco-friendly activities.

Assessing the Influence of Financial Inclusion on Environmental Degradation in the ASEAN Region through the Panel PMG-ARDL Approach

The rise of financial inclusion in recent years has attracted the attention of environmental economists to assess its role in environmental degradation. Therefore, this study was carried out with the aim of exploring the impact of financial inclusion on environmental degradation in the ASEAN region using balanced panel data for the period 2000–2019. First, panel unit root tests were employed to examine each data series for stationarity. Findings of the panel unit root tests depicted that all data series are stationary at the first difference. Second, Westerlund and Edgerton’s error correction panel cointegration test was employed to handle heterogeneity and cross-sectional dependence. Third, the PMG-ARDL approach was used to explore the long- and short-term effects of financial inclusion on environmental degradation. Findings of the PMG-ARDL found that financial inclusion, energy use, economic growth and urbanization are causing environmental degradation in the ASEAN region. Furthermore, the financial inclusion coefficient is 0.15, which is statistically significant at 5%. In the short run, a 1% increase in financial inclusion results in a 0.15% increase in environmental degradation, ceteris paribus. In the long run, financial inclusion and CO2 have a positive association that is statistically significant at 5% and has a coefficient value of 0.42. This implies that a 1% increase in financial inclusion results in a 0.42% increase in environmental degradation in the long run. Finally, this study recommends that financial inclusion must be incorporated into climate change adaptation efforts at the local, national and regional levels to address the side effects of increased CO2 emissions.

The effects of environmental tax on Ecological Footprint and Carbon dioxide emissions: a nonlinear cointegration analysis on Turkey

This article presents a nonlinear analysis in Turkey on the effect of an environmental tax (ET) on the ecological footprint (EFP) and carbon dioxide (CO₂) emissions. In the literature, most of the studies examining the effects of environmental taxes (ETs) on environmental degradation (ED) have used linear methods. The number of studies examining this relationship with nonlinear methods is few. However, there is no study examining the long-run effects of ETs on the EFP, which is one of the most important indicators of ED, using nonlinear analysis. This study contributes to the literature by investigating the long-run effects of ETs on EFP and CO₂ emissions in Turkey by nonlinear analysis. Therefore, the model consisting of annual data for the period 1994-2019 was estimated by Dufrénot et al. (2006) nonlinear cointegration test. According to the estimation results obtained, ETs do not have any long-run effects on EFP and CO₂ emissions. Accordingly, it can be concluded that ETs in Turkey do not affect preventing ED.

Exploring environment sensitivity to fiscal and monetary policies in China: using ecological footprints as a contemporary proxy

This paper is a pioneer attempt using ecological footprints, the latest environment sensitivity proxy to be regressed, contributing to the scarce literature concerning one of the most burning global dilemmas of the era. For econometric analysis, fiscal and monetary tools, green energy consumption, and economic growth have been chosen as a set of regressors data spanning 1990-2020 in China facing the highest total ecological footpaths. And giving priority to the relevancy, reliability, and robustness autoregressive distributed lag (ARDL), fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) have been applied for instant and eternal sensitivities, followed by the widely used stationarity tests (augmented Dicky-Fuller and Phillips-Perron tests) and bounds test. Granger's ordeal has also noticed causal inferences. Cointegrating findings are robust across all techniques, and ARDL results remain consistent regardless of short and prolonged duration. We witness positive and statistically significant (at 10%) responsiveness of ecological footprints (EFP) to China's rapid gross domestic output (GDP) growth per capita fueled by fossil fuels (primarily coal). Contrarily, negative/inverse sensitivity to expansionary fiscal (higher government expenditures, GEx), contractionary monetary policies (higher policy rate, DR), and green energy use (REnC). Besides, EFP demonstrates statistically significant reciprocal interconnection with GDP and REnC but a unidirectional connection with DR (DR → EFP). GDP has effective collaboration with REnC and GEx whereas single-sided relationship DR as (GDP → DR). Finally, some policy choices are endorsed.