The Link between Economic Complexity and Carbon Emissions in the European Union Countries: A Model Based on the Environmental Kuznets Curve (EKC) Approach

Is the load capacity curve a true phenomenon for OECD economies? Hidden behavior of financial institutions and markets in Environmental Sustainability

Over the last few decades, the globe has faced severe challenges in isolating entire nations from social, economic, and environmental issues. However, rising pollution levels have become the most debatable agenda. To resolve this, the world has introduced a few green initiatives, i.e., the Paris Agreement, the Kyoto Protocol and the Sustainable Development Goals (SDGs). Interestingly, to meet the desired threshold level, all stockholders demand massive finance to comply with such green initiatives. Thus, to highlight the importance of the financial sector, this study considers 26 OECD economies covering the period of 1982-2018. The leading importance of this study is utilizing the load capacity factor (LCF) as a decent proxy for sustainability. Similarly, the present empirical study utilizes advanced estimators to investigate the role of financial market index (FMI), financial institutions index (FII), renewable energy (REC) and income in environmental quality. The summarized results describe the positive role of REC in LCF in the specified nations. Conversely, FMI and FII are inverse-connected with the load capacity curve. Finally, the Load Capacity Curve (LCC) is validated for the selected economies. Interestingly, this study also suggests some imperative implications for boosting environmental sustainability. Such outcomes highlight the urgent need for legislative frameworks to accelerate the switch to renewable energy sources. Additionally, they emphasize the need for stricter oversight and control of financial institutions regarding their investments and policies for environmental preservation. Finally, the study raises the possibility that financial markets might obstruct ecological safeguards.

Estimating digital product trade through corporate revenue data

Despite global efforts to harmonize international trade statistics, our understanding of digital trade and its implications remains limited. Here, we introduce a method to estimate bilateral exports and imports for dozens of sectors starting from the corporate revenue data of large digital firms. This method allows us to provide estimates for digitally ordered and delivered trade involving digital goods (e.g. video games), productized services (e.g. digital advertising), and digital intermediation fees (e.g. hotel rental), which together we call digital products. We use these estimates to study five key aspects of digital trade. We find that, compared to trade in physical goods, digital product exports are more spatially concentrated, have been growing faster, and can offset trade balance estimates, like the United States trade deficit on physical goods. We also find that countries that have decoupled economic growth from greenhouse gas emissions tend to have larger digital exports and that digital exports contribute positively to the complexity of economies. This method, dataset, and findings provide a new lens to understand the impact of international trade in digital products.

Does economic complexity help in achieving environmental sustainability? New empirical evidence from N-11 countries

In view of the SDGs argued by UNO, it is vital to address the pressing issues regarding sustainable development. The aim of current study is to investigate the impact of economic complexity (ECC) on environmental sustainability. To achieve this aim, we sampled the 25 years of data of Next-11 countries over the period 1995 to 2019. The economic complexity was measured by the economic complexity index (ECI) while environmental sustainability was measured by two proxy variables including CO2 and greenhouse gas (GHG) emissions. The empirical analysis was established by utilizing the unit root test, cointegration test, FMOLS (fully modified OLS) and DOLS (dynamic OLS) models. The estimated coefficient values disclosed that ECC has a negative and statistically significant relationship with both CO2 and GHG emissions in the long run, implying that ECC ensured environmental sustainability. In addition, the analysis reveals that financial development has a negative while economic growth and energy imports have a positive and statistically significant association with both CO2 and GHG emissions. The findings of the current study suggested an important policy regarding the focus on ECC for achieving environmental sustainability in underlying economies. This study provides robustness to the existing literature in alternative data settings (N-11 countries) and by the unique objective of focusing on environmental sustainability.

Assessment of the environmental kuznets curve within EU-27: Steps toward environmental sustainability (1990-2019)

Reducing environmental pollution is a critical goal in global environmental economics and economic development. The European Union (EU) faces environmental challenges due to its development activities. Here we present a comprehensive approach to assess the impact of carbon dioxide (CO2) emissions, energy consumption (EC), population structure (POP), economy (GDP), and policies on the environment within the EU using the environmental Kuznets curve (EKC). Our research reveals that between 1990 and 2019, the EU-27 experienced an increase of +1.18 million tonnes of oil equivalent (Mtoe) per year in energy consumption (p < 0.05), while CO2 emissions decreased by 24.25 million tonnes (Mt) per year (p < 0.05). The highest reduction in CO2 emissions occurred in Germany (-7.52 Mt CO2 annually), and the lowest in Latvia (-0.087 Mt CO2 annually). The empirical EKC analysis shows an inverted-U shaped relationship between GDP and CO2 emissions in the EU-27. Specifically, a 1% increase in GDP results in a 0.705% increase in carbon emission, while a 1% increase in GDP2 leads to a 0.062% reduction in environmental pollution in the long run (p < 0.01). These findings indicate that economic development within the EU has reached a stage where economic growth positively impacts the environment. Overall, this study provides insights into the effectiveness of environmental policies in mitigating degradation and promoting green growth in the EU 27 countries.

Energy transition and environmental stability prospects for OECD economies: The prominence role of environmental governance, and economic complexity: Does the geopolitical risk matter?

The global increase in temperature and climate change signals the need for humanity to reduce greenhouse gas emissions and to adopt eco-friendly lifestyles. The 2023 United Nations Climate Change Conference (COP28) in the UAE emphasized this, urging nations to commit to the Paris Agreement and pursue a greener, carbon-free future. In recent decades, climate change has become a critical issue, primarily because of the extensive use of fossil fuels and conventional energy resources. Economic growth has led to an increase in energy consumption and widespread environmental damage. The present study empirically explores whether any changes in environmental governance, economic complexity, geopolitical risk, and the interaction term influence energy transition and environmental stability in OECD economies over the period 1990-2021. Novel econometric methods, including Westerlund co-integration and the Method of Moments Quantile Regression (MMQR), are employed to address complexities such as cross-sectional dependency and panel causality. The key findings from the MMQR technique showed a positive link between environmental governance and economic complexity in driving sustainable energy transitions, thus bolstering environmental resilience in OECD countries. However, economic complexity counterbalances environmental stability. Significantly, geopolitical risk acts as a moderating variable, enhancing the effects of governance and complexity on sustainable energy practices and environmental stability. Based on these insights, this study recommends strategic initiatives, including investment in eco-friendly technologies, to fast-track the shift to clean energy and strengthen environmental resilience in OECD countries. These strategies align with the broader objectives of global sustainable development, offering a path towards a greener and more sustainable future.

Impact of green digital finance on green economic recovery and green agricultural development: implications for green environment

This study explores the potential of green digital finance and green agricultural growth to contribute to the green economic recovery of the BRICS economies. We examine the relationship between these variables using empirical data and various statistical techniques, including vector error correction, co-integration, unit root tests and long-run analysis. Our results suggest that well-functioning financial institutions play a crucial role in facilitating the structural transformation of green digital finance and promoting green agricultural growth to achieve green economic recovery in the BRICS region. Our findings underscore the need for pro-financial and green economic development policies and institutions to support and enhance economic recovery. Our results are robust and supported by our study. We also suggest future research directions for stakeholders interested in promoting sustainable economic growth in the BRICS countries.

Transitioning towards a sustainable environment: the dynamic nexus between economic complexity index, technological development and human capital with environmental quality in India

This paper aims to investigate the dynamic nexus between economic complexity index (ECI), technological development (TIN), human capital (HC) and environmental quality in India for transition towards a sustainable environment. This study is based on secondary data covering the period from 1985 to 2018. For empirical analysis, this study applied "Stochastic Impacts by Regression on Population, Affluence, and Technology" (STIRPAT) model framework under the estimation of autoregressive distributed lag (ARDL) model and vector error correction model (VECM) model. The empirical findings of model 1 show ECI, TIN, HC and urbanization (URB) as the helping hands to mitigate the problem of environmental degradation by shrinking the level of EF, whereas for model 2, ECI and TIN failed to influence the CO2 emissions, but HC served as a stimulant for environmental quality enhancement by declining the level of CO2 emissions. In contrast, GDP growth and URB strengthen the CO2 emissions levels. Moreover, in VECM framework, estimated findings reveal that the covariables Granger-cause EF and CO2 emissions, inferring that causality flows asynchronously from its covariables to EF and CO2. Impulse response function (IRF) revealed that the responses in EF and CO2 emissions ascribed to changes in its covariables. The outcome of the study has some implications for environmental policy strategists to prepare sustainable environment policies and other responsible authorities for sustainable development goal (SDGs), academician and scholars. All the stakeholders involved in environmental economics and policymakers can evaluate this study to design proper policy framework with respect to the environment. There are few studies that explore the dynamic nexus between ECI, TIN and HC with environmental quality in the control environment of URB and GDP growth using the STIRPAT model for India.

What do we learn from Nexus between trade diversification and structural change: informing the future about climate action and Sustainability

Economic complexity is considered key a driver of social change, structural change, and economic development. Economic complexity is mostly used to capture issues apropos product diversification of exports, trade, technological innovation, human knowledge, and skills. The current study has conducted a detailed bibliometric review of economic complexity, export quality, and trade diversification. In doing so, the authors used the literature up to 2021 to unveil economic complexity's contextual information that witnessed structural change, social change, and trade indicators. The current study is the first integrative review to report the theoretical contribution, future research agendas, and thematic analysis of economic complexity, export quality, and export diversification. Our study, on the subject of economic complexity, export diversification, and import diversification in the period from 1966 to 2021, was carried out by systematically scanning 386 documents, and it is one of the pioneering studies in this field. In addition, economic diversity, development, and economic complexity; export diversification, import diversification, trade openness, and economic growth; energy, environmental Kuznets curve, and economic complexity; and sustainability and economic diversification are the four main research topics of the study. The findings are discussed apropos of economic complexity and exports, methodological aspects of economic complexity, and environmental issues nexus with economic complexity. The current study reports novel findings toward a path for achieving SDG-9 (industry and innovation) and SDG-13 (climate action). The biometric review enables researchers and policymakers to understand export quality, economic complexity, and the trade nexus and report future research directions for achieving sustainable growth in industries and innovation.

Revisiting the environmental Kuznetz curve and pollution haven hypothesis in N-11 economies: Fresh evidence from panel quantile regression

Human activities in recent decades have severely affected environmental quality, and CO₂ emissions have irreparable consequences on human health and the survival of the earth. Moreover, achieving sustainable development goals requires the expansion of environmental literature to accelerate the performing of critical actions. With this in mind, this study evaluates the impact of foreign direct investment, economic complexity, and the utilization of renewable energy on CO₂ emission in N-11 countries from 1995 to 2019 by Panel Quantile Regression. As a novelty, the interaction between economic complexity and foreign direct investment is considered to get a better comprehension. Given the results, Environmental Kuznetz Curve is validated in N-11 countries through economic complexity. Notably, the impact of economic complexity is more substantial and robust in the incipient stages of industrialization. Furthermore, foreign direct investment is a destructive factor for environmental quality, and Pollution Haven Hypothesis is not rejected. Interestingly, the interaction of economic complexity and foreign direct investment mitigates the trend of CO₂ emissions. Eventually, the utilization of renewable energy reduces CO₂ emissions. Thereby, applying more strict environmental regulations and standards, developing green energy infrastructure and technologies, improving institutional quality, and supporting knowledge-based and technology-intensive exports are the main policy recommendations of this study.

Toward a sustainable development in sub-Saharan Africa: do economic complexity and renewable energy improve environmental quality?

Emission reduction has become more crucial for environmental sustainability in light of the growing concerns about climate change. Many studies have identified that structural change and clean energy technologies improve environmental quality. However, there is an absence of empirics that focus on the sub-Saharan Africa (SSA) context, which shifted the structure of their economies from the agriculture sector towards sophisticated manufacturing activities that affect the environment. Hence, this study aims to investigate the impacts of economic complexity and renewable energy consumption on carbon emissions in 41 SSA countries between 1999 and 2018. The study adopts contemporary heterogeneous panel approaches to overcome heterogeneity and cross-sectional dependence issues that usually arise in panel data estimates. The empirical findings of the pooled mean group (PMG) cointegration analysis indicate that renewable energy consumption alleviates environmental pollution in the long run and short run. In contrast, economic complexity improves environmental quality in the long run but not in the short run. On the other hand, economic growth contributes adversely to environmental degradation in the long run and short run. The study indicates that urbanization worsens environmental pollution in the long run. In addition, the outcomes of the Dumitrescu-Hurlin panel causality test indicate a unidirectional causal path from carbon emissions to renewable energy consumption. The causality results also suggest that carbon emission has bidirectional causation with economic complexity, economic growth, and urbanization. Therefore, the study recommends that SSA countries change their economic structure towards knowledge-intensive production and adopt policies that encourage investment in renewable energy infrastructures by subsidizing the initiatives to achieve clean energy technologies.

Green complexity, economic fitness, and environmental degradation: evidence from US state-level data

Green production is one of the major debates as environmental degradation poses threats globally. The paper attempts to explore the relationship between green production and environmental quality by using Economic Fitness approach. We develop a Green Complexity Index (GCI) dataset consisting of 290 traded green-labeled products and Economic Fitness Index (EFI) for the US states between 2002 and 2018. We analyze the environmental performance of green production using the GCI and EFI data at the sub-national level. Findings indicate that exporting more complex green products has insignificant effects on local (i.e., sulfur dioxide, particulate Matter 10) and global polluters such as carbon dioxide, even accounting for per capita income. Yet, economic fitness has a significant negative impact on the emission levels implying that sophisticated production significantly improves environmental quality in the USA. The insignificant impact of GCI on environmental degradation suggests that green product classifications should incorporate the production and end-use stages of goods to limit the adverse environmental effects of green-labeled products.

Ecological footprint in Bangladesh: Identifying the intensity of economic complexity and natural resources

Recent years have seen a spike in the number of academics utilizing the ecological footprint as a stand-in for environmental depletion because of its extensive nature and its ability to capture the worsening of the ecosystem. Thus, this article brings a new effort to analyze the effect of Bangladesh's economic complexity and natural resources on its ecological footprint over a long period, from 1995 to 2018. Using a nonlinear autoregressive distributed lag (NARDL) model, this paper suggests that a more complex economy has a significantly positive effect on ecological footprint over the long term. If the economy is simplified, it has less impact on the environment. For Bangladesh, an increase in economic complexity of 1 unit leads to an ecological footprint increase of 0.13 units, while a drop in economic complexity of 1% causes an ecological footprint decrease of 0.41%. Results also demonstrate that both positive and negative changes in natural resources contribute to rises in environmental quality in Bangladesh, which negatively influences the country's ecological footprint. Quantitatively, a 1% increase in natural resources reduces the ecological footprint by 0.14%, whereas a 1% decrease in resources has the opposite effect, reducing it by 0.59%. In addition, an asymmetric Granger causality test confirms the existence of a unidirectional causal link from ecological footprint to a positive partial sum of natural resources and from a negative partial sum of natural resources to ecological footprint. Finally, the findings point to a two-way causal relationship between the size of an economy's ecological footprint and the complexity of its economy. Policymakers should boost technological advances and lessen operational costs by adopting an innovative Research and development framework and devoting more cash to natural resource policies that promote an adaptable ecological footprint.

Investigating the energy-environmental Kuznets curve under panel quantile regression: a global perspective

Energy is regarded as an engine of economic growth and an important ingredient of human survival and development, but it can lead to deterioration of environmental quality. The study investigates the energy environmental Kuznets curve (EEKC) during the 1990-2017 period for 144 countries using models for total energy, renewable energy, and non-renewable energy consumptions. We employ panel mean and quantile regressions, accounting for individual and distributional heterogeneities. It is found that the EEKC sustains among the higher middle-income countries while it cannot be verified at some lower-income quantiles due to the heterogeneous nature of the different groups of countries. The relationship between economic growth, total energy, and non-renewable energy consumption is positive and non-linear. The quantile estimations revealed mixed (positive and non-linear, inverted U-shape, U-shape, and N-shape) EEKC. The maximum and minimum turning values of GDP per capita for total energy consumption (is 43,201.58 and 89,630.49), for renewable energy consumption (53,535.07 and 89,869.41), and for non-renewable energy consumption (42,188.16 and 89,487.71). Urbanization and population growth had positive impacts on energy consumption while these effects become more significant as moving from low to high-income quantiles. The study implies that while the developed nations can adopt energy-efficient policies without compromising on the growth momentum and environment, this might be not recommended for the developing nations and it would be preferable for these countries to "grow first and clean up later." The study indicates the importance of the developed nations to support the developing countries to achieve economic growth along the EEKC by transferring energy-efficient technologies.

Exploring the nexus between economic complexity, energy consumption and ecological footprint: new insights from the United Arab Emirates

Purpose

Motivated by the 2030 UN Sustainable Development Goals (SDG-7: clean and affordable energy, SDG-8: sustainable economic growth, SDG-13: climate action), this study aims to investigate the role of economic complexity, disaggregated energy consumption in addition to economic growth, financial development, globalization and urbanization on the ecological footprint of United Arab Emirates (UAE).

Design/methodology/approach

This study adopts unit root tests (with and without a structural break), autoregressive distributed lag (ARDL) bounds test and dynamic ordinary least squares.

Findings

The results obtained from the ARDL model suggest that economic complexity (EC), nonrenewable energy and economic growth increase the ecological footprint in both the short and long run, thus deteriorating the environment. However, renewable energy and urbanization reduce the ecological footprint in UAE during the two periods, thus improving environmental quality. Globalization and financial development have different influences on ecological footprint during these periods. These findings are robust to other estimation techniques.

Practical implications

Based on these results, this study offers significant policy implications such as increasing renewable energy supply, particularly solar energy and aligning the product manufacturing structure and complexity toward producing environmentally friendly products which can be used to realize the nation’s agenda of reducing fossil fuels consumption to 38% by 2050 and achieving sustainable environment and growth.

Originality/value

This study provides an empirical attempt to investigate the influence of EC and renewable and nonrenewable energy on the ecological footprint of the UAE.

Economic complexity and CO2 emissions in OECD countries: sector-wise Environmental Kuznets Curve hypothesis

This study examines the Environmental Kuznets Curve hypothesis by estimating the relationship between economic structure and economic complexity with the environmental pollution in OECD countries during 1971-2016. In that respect, this research investigates how various economic sectors affect environmental pollution differently. The results confirm the Environmental Kuznets Curve hypothesis, which implies the influential role of economic structure and complexity in socio-economic developmental phases. In addition, the results show that most of the OECD countries are on the left side of the curve, implying positive connection between economic complexity and CO2 emissions. In contrast, only 3 OECD countries (Japan, Switzerland, and Germany) are close to the turning point, indicating that their patterns are sustainable for socio-economic development. The sectoral economic results affirm the most pollutant structure of the service sector, compared with the other economic sectors. Hence, new projects should attach great attention to their environmental impacts, specifically in the service sector planning. Regarding the complexity analysis, policymakers are advised to embrace knowledge-intensive restructuring of economic sectors.

An empirical assessment of electricity consumption and environmental degradation in the presence of economic complexities

To a large extent, the theories and concepts behind the effect of ecological footprint have been the paramount concern of the recent literature. Since the rising and falling of environmental degradation have been a continuous issue since the first phase of development, determinants such as economic complexity may play a critical role in achieving long-term sustainable development in the framework of environmental Kuznets curve (EKC) paradigm. Therefore, this research expands on the notion of an EKC paradigm for the world's top ten most complex economies by considering four variables, such as real GDP per capita, electricity consumption, trade openness, and a new putative factor of environmental obstacle, the economic complexity index (ECI). This is one of the first studies to look at the impact of ECI on the ecological footprint of a specific sample from 1998 to 2017. The findings demonstrate a continuous inverted U-shaped link between real GDP per capita, the square of real GDP per capita, and ecological footprint. The EKC hypothesis is found to be valid in the long term in the examined complex economies. The findings of the panel autoregressive distributed lag (ARDL) of the pooled mean group (PMG) and fully modified ordinary least squares (FMOLS) estimations demonstrate that in the long term, electric power usage contributed to the carbon footprints. Furthermore, the economic complexity index and trade openness increase environmental performance over time. To determine if there is causation between the variables, we employ the panel vector error correction model (VECM) framework. Particularly, the results show unidirectional causality running from electric power consumption to ecological footprint and bidirectional causal relationship between (1) economic growth and ecological footprint; (2) square of economic growth and ecological footprint; (3) economic complexity index and ecological footprint; and (4) trade openness and ecological footprint.

Investigating the moderating role of economic policy uncertainty in environmental Kuznets curve for South Africa: Evidence from the novel dynamic ARDL simulations approach

South Africa, one of the emerging markets and fast-developing economies in Sub-Saharan Africa recognised for varying world's natural assets on the international market, has recorded significant economic growth in the previous several years. However, aside from the ecological repercussions of energy generation, how economic uncertainties moderate the effects of energy intensity, renewable and non-renewable energy usage, and economic complexity on the environment has largely gone unnoticed. As a result, this paper addresses an important empirical vacuum by exploring the moderating influence of economic policy uncertainty in the environmental Kuznets curve for South Africa from 1960 to 2020. Results from the novel dynamic autoregressive distributed lag simulations framework reveal the following key findings: (i) economic policy uncertainty accelerates environmental degradation in both the short and long run; (ii) economic growth (as measured by the scale effect) increases environmental degradation, whereas the square of economic growth (as measured by the technique effect) slows it down, confirming the presence of the environmental Kuznets curve (EKC) hypothesis; (iii) environmental quality is deteriorated by energy intensity, economic complexity, non-renewable energy usage, and trade openness; (iv) the use of renewable energy and technological innovation increase environmental quality; (v) whereas the moderating effects of economic policy uncertainty on the environmental impacts of energy intensity, renewable and non-renewable energy consumption result in an increase in environmental destruction, its moderating effect on environmental implication of economic complexity plays an important role in improving environmental quality. These findings permit us to draw important policy recommendations for South Africa for improving environmental quality.

Investigation of economic and financial determinants of carbon emissions by panel quantile regression analysis: the case of Visegrád countries

This study determines the impacts of gross domestic product, domestic bank credits given to private sector, and military expenditures on carbon emissions based on 1990-2019 time period. The panel quantile regression approach is applied for the Visegrád group countries. Our empirical results reveal that domestic bank credit given to private sector has a positive and meaningful impact on carbon emissions at medium and high quantile levels. On the other hand, it has been determined that gross domestic product has a reducing impact on carbon emissions, but military expenditures have an increasing impact on carbon emissions. Besides, as consequences of such tests, the difference between the quantiles, that is, the heterogeneous structure was revealed. A separate model was created with a different panel quantile approach for robustness control, and the results were compared by giving different values to penalty term. These results provide strong evidence for decision-makers and implementers.

Pathways to securing environmentally sustainable economic growth through efficient use of energy: a bootstrapped ARDL analysis

Oman has traditionally relied upon natural gas and oil for meeting its domestic energy demand. As a result, despite growing economically, the level of carbon dioxide emissions in Oman has persistently surged; consequently, the nation has failed to ensure environmentally sustainable economic growth. Against this background, this current study aims to explore the impacts of energy consumption, energy efficiency, and financial development on Oman's prospects of attaining environmentally sustainable growth over the 1972-2019 period. The estimation strategy is designed to take into account the structural break issues in the data. Using the carbon productivity level as an indicator of environmentally sustainable economic growth, we find long-run associations amid the study variables. Besides, higher energy consumption and greater financial development are found to impede carbon productivity while improving energy efficiency is observed to boost carbon productivity in Oman. Therefore, it is pertinent for Oman to consume low-carbon and energy-efficient fossil fuels, improve energy efficiency levels, and green its financial sector to achieve environmentally sustainable growth.

The dynamic interaction between circular economy and the environment: Evidence on EU countries

This study examined the causal dynamics between circular economy (CE) and carbon dioxide (CO₂) emissions in European Union (EU) countries. The selected CE indicators included the trade in recyclable raw materials (TRM) and the circular material use rate (CMR) in the secondary raw materials area, the generation of municipal waste per capita (GMWp) in the production and consumption area and the recycling rate of municipal waste (RMW) in the area of waste management. The coefficients of the panel cointegration equations showed that for every 1 percentage point increase in RMW, average CO₂ emissions decreased by 0.5%, while for every 1 percentage point increase in GMWp and TRM, the average CO₂ emissions increased by 0.263% and 0.101%, respectively. It also showed that the recycling volumes and recycling rate had a positive but very limited impact on the CMR. The panel vector error correction model result showed that there were long-run bidirectional causalities between CE indicators and carbon emissions, and the TRM had a short-run negative impact on waste generation. However, the short-run impact of CE indicators on carbon emissions was not significant, which may be because the European CE is still in its infancy. The finding suggests that policymakers should adopt multilateral policies such as reducing carbon emissions, improving the efficiency and productivity of resource management and waste recycling, and increasing investment and innovation in the secondary raw materials market to achieve resource decoupling and impact decoupling. The decoupling of these two types is a necessary condition for sustainable development.

The criticality of tourism development, economic complexity, and country security on ecological footprint

What kinds of countries are likely to be prosperous and have a sustainable environment at the same time? How might countries reorient their policy setting to be more capable of suppressing environmental degradation? To explore these questions, this research examines data from 99 countries for 2006-2017, takes the six major forms of ecological footprint (EF) as indicators of environmental quality, and probes the environmental Kuznets curve (EKC) hypothesis via quantile regression approach. We find that tourism development leads to greater environmental degradation, with tourism development particularly corresponding to more usage of carbon absorption land and cropland. The lower the country security is, the better is the environmental quality. Economic complexity also worsens environmental quality. However, country security weakens the negative influence of tourism development and economic complexity on environmental quality, specifying that better country security stalls the negative impact of tourism and economic complexity on environmental quality. Results mostly support the tourism- and country security-induced EKC hypotheses in fishing footprint, whereas economic complexity-induced EKC is generally validated in cropland footprint. Finally, we present that tourism arrivals, economic complexity, and country security have varying impacts across diverse ecological footprint quantiles.

Quantile estimation of ecological footprint and economic complexity in emerging economies: The moderating role of increasing energy consumption

There are increasing debates on the relationship between economic complexity and environmental degradation. This study deepens our understanding of this nexus in 11 emerging economies given the moderating role of energy consumption while controlling for economic development, trade openness and population growth. The findings from the quantile regression technique reveal that emerging economies are characteristic of low energy consumption, leading to insignificant contributions of economic complexity to environmental degradation across the spectrum as they also have very low-trade openness. Further results show the invalidity of the EKC between energy use (such as fossil fuels) and environmental degradation in emerging economies. Moreover, the Environmental Kuznets Curve (EKC) between economic development and environmental degradation is valid especially for those countries in the low and median quantiles (Egypt, Indonesia, and Vietnam). Also, the EKC hypothesis between population and environmental degradation is valid only for countries in the high and highest quantiles (Korea Republic, Turkey, Mexico and Iran). Finally, the results revealed that trade openness strictly reduces environmental degradation across the spectrum. Policy implications, limitations of the study and direction for future research are discussed.

The new paradigm of economic complexity

Economic complexity offers a potentially powerful paradigm to understand key societal issues and challenges of our time. The underlying idea is that growth, development, technological change, income inequality, spatial disparities, and resilience are the visible outcomes of hidden systemic interactions. The study of economic complexity seeks to understand the structure of these interactions and how they shape various socioeconomic processes. This emerging field relies heavily on big data and machine learning techniques. This brief introduction to economic complexity has three aims. The first is to summarize key theoretical foundations and principles of economic complexity. The second is to briefly review the tools and metrics developed in the economic complexity literature that exploit information encoded in the structure of the economy to find new empirical patterns. The final aim is to highlight the insights from economic complexity to improve prediction and political decision-making. Institutions including the World Bank, the European Commission, the World Economic Forum, the OECD, and a range of national and regional organizations have begun to embrace the principles of economic complexity and its analytical framework. We discuss policy implications of this field, in particular the usefulness of building recommendation systems for major public investment decisions in a complex world.

The anthropogenic consequences of energy consumption in the presence of uncertainties and complexities: evidence from World Bank income clusters

In environmental management, many studies have examined the energy consumption-emission nexus in detail. However, for the first time in the literature, this study considers how the Economic Complexity Index (ECI) and economic policy uncertainty (EPU) moderate the contribution of energy consumption to emissions for the four World Bank Income clusters. The system generalised methods of moments are applied to data for 109 countries from 1996 to 2016. Based on the main model (grouped clusters) estimations, the result revealed the existence of the environmental Kuznets curve (EKC) hypothesis. Also, an increase in air transport and consumption of energy releases more carbon emissions to the climate. Interestingly, ECI decreases carbon emission significantly while EPU does not have a significant impact. Moreover, the study revealed that ECI moderated the impact of other variables on emission, but EPU is not a significant moderator. Furthermore, a comparative analysis among the four incomes suggests that the EKC hypothesis holds only in the high-income clusters; ECI is a significant predictor of carbon emission in the four clusters, but it only decreases the emission in high-income clusters. This corroborates the debate on climate change and the productive capacity of high-income countries. Given the foregoing, several policy measures were recommended.

Environmental quality and the role of economic policy uncertainty, economic complexity, renewable energy, and energy intensity: the case of G7 countries

This study explores the environmental impacts of economic policy uncertainty, economic complexity, renewable energy, and energy intensity on the countries in the Group of Seven (G7) countries. To this end, the study employs fully modified ordinary least squares and a fixed effects model with Driscoll and Kraay, Rev Econ Stat 80:549-560, (1998) robust standard errors and a panel dataset from 1997 to 2015. The findings demonstrate a long-term relationship between the variables of interest and carbon dioxide emissions and the ecological footprint. Specifically, high energy intensity increases environmental pollution while high economic policy uncertainty and renewable energy reduces environmental degradation. The environmental Kuznet curve of economic complexity and environmental quality holds for G7 countries. Moreover, economic policy uncertainty strongly moderates the environmental effect of renewable energy, economic complexity, and energy intensity. Specifically, although economic policy uncertainty amplifies the beneficial environmental effects of renewable energy and economic complexity, it enlarges the harmful effect of energy intensity on environmental quality. These empirical outcomes allow us to draw useful implications for policy makers to mitigate the environmental degradation.

Economic complexity versus ecological footprint in the era of globalization: evidence from ASEAN countries

The Association of Southeast Asian Nations (ASEAN) countries have witnessed significant growth over the years amidst increase energy consumption, dwindling biocapacity, and increasing ecological footprint (EF). However, while the influence of energy consumption, globalization, and economic growth on EF has been previously examined, the literature is silent as regards the association between the level of skills and knowledge needed in the creation of exported goods and the EF, particularly in the ASEAN region. The current study is a maiden attempt to explore the impact of economic complexity on EF and CO₂ emissions in the said region while considering heterogeneity and cross-sectional dependence among countries. From the findings, economic complexity, energy consumption, and economic growth increase EF and CO₂ emissions. Globalization reduces the EF, but its impact on CO₂ emissions remains unclear. Economic complexity has a more devastating impact in Indonesia, but less severe in Singapore. The direction of causality flows from economic growth, economic complexity, and energy consumption to EF. A feedback causality exists between globalization and EF, and between energy consumption, globalization, and CO₂ emissions. The limitations of the study and directions for future research have been highlighted along with relevant policy directions.

Carbon neutrality target for leading exporting countries: On the role of economic complexity index and renewable energy electricity

In order to contribute to the existing limited energy-environment literature, the present study analyze the carbon neutrality targets of the 16 major exporting economies while considering the role of economic complexity and renewable energy electricity consumption empirically by investigating the most recent dataset covering the period from 1990 to 2019 by employing advanced econometric techniques. This study uses the economic complexity index, connecting the country's productive structure with the amount of knowledge that the products represent. Employing various cointegration and regression techniques such as augmented mean group (AMG) and dynamic ordinary least square (DOLS) confirms the long-run cointegration among the variables such as economic growth, economic complexity, renewable energy consumption, and CO₂ emission. Also, this study provides evidence that confirms the validity of the environmental Kuznets curve hypothesis in the leading exporting economies. Regarding the carbon neutrality target, we found that both economic complexity and renewable electricity, if increase by one percent each, significantly reduce CO₂ emissions by 0.1491 (AMG) and 0.130% (DOLS) and 0.160 (AMG) and 0.203% (DOLS), respectively, that help attain the carbon neutrality target.

The impact of economic complexity on embodied carbon emission in trade: new empirical evidence from cross-country panel data

Establishing a fair platform for allocating carbon emission responsibility worldwide determines the sustainability and efficiency of the world's climate policy and framework. In the context of global environmental load displacement and CO2 transfer, this paper endeavors to examine the relationship between economic complexity and embodied carbon emissions based on cross-country panel data. Our study utilizes the generalized method of moments (GMM) approach to estimate our dynamic models covering 34 OECD countries and 24 non-OECD countries from 1995 to 2015. The empirical results show a heterogeneous impact of economic complexity on embodied carbon emissions in exports (EEE) and imports (EEI). Besides, the scale effect, composition effect, and technology effect are also significant drivers of embodied carbon emissions. The improvement of economic complexity can decrease the marginal effects of export scale and export structure on foreign EEE (but not domestic EEE) significantly, while the marginal positive impacts of technology on EEE can be further enhanced by economic complexity growth. Moreover, there is no strong evidence to prove the significant indirect impacts of economic complexity on foreign carbon emission embodied in imports, while economic complexity has significantly positive indirect impacts on domestic carbon emission embodied in imports only through import scale. In the subsample regressions, we found asymmetric impacts of economic complexity between high-income countries and low- and middle-income countries.

Progress in nuclear energy with carbon pricing to achieve environmental sustainability agenda: on the edge of one's seat

The Paris agreement (COP21) emphasized the need to progress toward using low-carbon energy technologies, including nuclear power, that is favorably looked for to meet the challenges to reduce an enormous increase in global temperature to below 2 °C. The cost of carbon pollution is highly induced by the energy sector that damages the global environmental sustainability plan. The alternative and nuclear energy demand is an optimized solution to decrease carbon damages, which can be better work under the imposition of carbon taxes on polluting industries. This study works in a given direction to analyze the role of alternative and nuclear energy, carbon pricing, FDI inflows, fossil fuel combustion, economic growth, and population density on the cost of carbon pollution in a panel of 90 selected countries for a period of 1995-2018. The results confirmed a "nuclear energy-augmented environmental Kuznets curve" with a turning point of 39.974% of total energy demand across countries. The result implies that alternative and nuclear energy initially increases carbon damages. Simultaneously, it decreases at the later stages of atomic energy expansion; thus, nuclear power growth is imperative for long-term sustainable development. A positive relationship is found between carbon pricing and carbon damage, while a negative relationship is between fossil fuel combustion and carbon damage across countries. The results conclude that expansion in nuclear energy would help reduce the cost of carbon pollution to achieve environmental sustainability agenda across countries.

The Impact of the Digital Economy on CO2 Emissions: A Theoretical and Empirical Analysis

Since the Industrial Revolution, human activities have led to the emission of a lot of greenhouse gases, such as carbon dioxide, sharply increasing the concentration of greenhouse gases in the atmosphere and resulting in serious global warming. With the rapid development of computer technology, the digital economy is gradually becoming the engine of economic growth. As a new economic mode, how the digital economy affects the environment is worth studying. In this paper, we introduced the digital economy into the Solow growth model as technological progress and conducted fixed-effects regressions based on the global panel data of 190 countries from 2005 to 2016. We found an inverted U-shaped, non-linear relationship between CO2 emissions and the digital economy, which supports the environmental Kuznets curve (EKC) hypothesis. We suggest that governments need to not only adopt hedging policies to reduce CO2 emissions caused by the digital economy in the early stage but also promote the development of the digital economy to achieve the goal of global collaborative environmental protection.

The increases and decreases of the environment Kuznets curve (EKC) for 8 OECD countries

In this paper, we investigate the validity of the environmental Kuznets curve (henceforth, EKC) hypothesis for 8 OECD countries. To this aim, we decompose the per capita GDP series into its increases and decreases and consider only increases by excluding decreases from the model. Therefore, this method may enable us to test the EKC hypothesis more accurately, in accordance with the original theory. Following decomposition, we apply the fixed-effect regression model with Driscoll-Kraay standard errors, and the common correlated effects mean group (CCEMG) estimator. Empirical findings indicate that while the undecomposed model with undecomposed per capita GDP series supports the EKC hypothesis for 4 out of 8 countries, the decomposed model with decomposed per capita GDP series does not do so for any country. Hence, these mixed results reveal a need to employ different alternative techniques, such as the data transformation/decomposition applied in this study, for testing the EKC hypothesis.

Determinants of ecological and carbon footprints to assess the framework of environmental sustainability in BRICS countries: A panel ARDL and causality estimation model

The purpose of the present study is to evaluate the effects of financial development, human capital, globalization, and renewable energy consumption on ecological and carbon footprint. For this purpose, the data was collected from four countries i.e. Brazil, Russia, India, and China for 20 years (1997-2016). The 20 years panel data collected for these countries was analyzed through "auto-regressive distributed lag" (ARDL). Findings of this study reveal that human capital is a significant positive determinant of environmental degradation in short run and long run while renewable energy consumption is a significant negative determinant of environmental degradation in short run and long run. Findings further reveal that globalization significantly reduces environmental degradation in short run and long run. Furthermore, findings show that the financial development significantly positively affects the environmental degradation in short run and long run. Therefore, renewable energy consumption and globalization are found to be negative predictors of ecological footprint and carbon footprint while human capital and financial development are found to be positive predictors of ecological footprint and carbon footprint. These findings are expected to be great contribution to the literature and practice, as they will help researchers and policymakers to realize the relative importance of energy, educational, economic, and trade policies in determining the environmental degradation.

Environmental Kuznets Curve and the Pollution-Halo/Haven Hypotheses: An Investigation in Brazilian Municipalities

There is much discussion on the non-linear relationship between economic growth and carbon dioxide (CO2) emissions. Additionally, the effects of Foreign Direct Investment (FDI) on the environment are ambiguous, as both beneficial (i.e., pollution-halo) and harmful (i.e., pollution-haven) effects were found. Therefore, the literature presents no consensus on either of these topics. This is especially problematic for developing regions, as these regions represent growing economies interested in receiving foreign investments, and their CO2-related research is limited. This study aims to understand the impacts of economic growth and FDI on the CO2 emissions of São Paulo state, Brazil. To perform this study, a unique dataset on regional FDI was built, and 592 municipalities were included. The analyses combine linear and non-linear estimations, and the results suggest a non-linear relationship between Gross Domestic Product (GDP) per capita and CO2 emissions, along with a negative association between FDI and CO2. Finally, this study discusses possible policy implications and contributes to the international literature.

Linking Economic Complexity, Diversification, and Industrial Policy with Sustainable Development: A Structured Literature Review

Research on economic diversification and complexity has made significant advances in understanding economic development processes, but has only recently explored environmental and social sustainability considerations. In this article we evaluate the current state of this emerging literature and reveal 13 research gaps. A total of 35 different keywords and methods from structured literature reviews and network science helped to identify 374 scientific articles between 1988 and 2020 and revealed a fragmented research landscape around three larger network communities: (1) industrial policies, climate change, and green growth; (2) economic complexity and its association with inequality and environmental sustainability; and (3) economic diversification, including studies on livelihood diversification in poor areas. Economic complexity research applies new empirical methods and considers both social and environmental sustainability, but seldom scrutinizes theory and policy. Industrial policy research focuses on green growth policies but tends to omit social sustainability issues and advanced empirical methods. Research on economic diversification in poor regions provides insights on the livelihood diversification of farmers, but is disconnected from the economic complexity and industrial policy research. This review helps to summarize the main contributions and shows pathways for potential mutual learning between these communities for the sake of sustainable development.

The Impact of Economic Complexity on the Formation of Environmental Culture

This paper establishes economic complexity as a powerful predictor of environmental attitudes. While the economic complexity index (ECI) has been associated with a series of economic outcomes, yet there has not been a link in the literature between ECI and environmental attitudes. This research pushes forward the hypothesis that economic complexity shapes cultural values and beliefs. The research method used is a multilevel empirical analysis that associates aggregate values of the ECI, at the country level, with individual responses related to attitudes towards the environment. Our findings suggest that a marginal increase of the ECI, increases by 0.191 the probability to be a member of environmental organisations and an increase by 0.259 in the probability to engage in voluntary work for the environment. To further reinforce our findings by ensuring identification we replicate the benchmark analysis using as a proxy of a country’s level of economic complexity, the average ECI of the neighbouring countries (weighted by population and/or volume of trade). With a similar intention, i.e., to mitigate endogeneity concerns as well as to further frame our findings as “the cultural implications of ECI” we replicate our analysis with a sample of second generation immigrants. The immigrant analysis, suggests that the level of economic complexity of the parents’ country of origin, has a long-lasting effect on second generation immigrants’ attitudes related to the environment. Because humankind’s attitudes and actions are of key importance for a sustainable future, a better understanding as to what drives environmental attitudes appears critical both for researchers and policy makers.

Renewable and non-renewable energy consumption, economic complexity, CO2 emissions, and ecological footprint in the USA: testing the EKC hypothesis with a structural break

The economic complexity index, which indicates the level of knowledge and skills needed in the production of the exported goods, is a measure of economic development. Some researchers have investigated the validity of the environmental Kuznets curve (EKC) hypothesis by considering the effect of economic complexity on environmental pollution. This study, for the first time, examines the impact of economic complexity, globalization, and renewable and non-renewable energy consumption on both CO₂ emissions and ecological footprint within the framework of the EKC hypothesis in the USA. To this end, the combined cointegration test and three different estimators are utilized for the period from 1980 to 2016. The main finding of the study indicates that the inverted U-shaped EKC relationship between economic complexity and environmental pollution holds for the USA. In addition to this finding, globalization and renewable energy consumption play a dominant role in reducing environmental pollution, while non-renewable energy consumption contributing factor to environmental pressure. Overall, the outcomes indicate that increasing economic complexity helps to minimize environmental degradation after a threshold, and the US government can provide a better environment by using renewable energy sources and globalization. Graphical abstract.

Nonlinearity between CO2 Emission and Economic Development: Evidence from a Functional Coefficient Panel Approach

This paper investigates the nonlinear relationship between CO2 emission and economic development using a newly developed functional coefficient panel model. In contrast to the existing literature, which suggests that the income elasticity of CO2 emission is parametrically modeled as a function of income, the income coefficient of CO2 emission is set as a function of both income and time. Then, we estimate the income elasticity in a nonparametric way using the country panel data covering 1971–2017. By doing so, we impose richer dynamics to the income elasticity not only over income but also over time. Our empirical results indicate that the income elasticity has decreased over time for high-income countries, whereas it has increased over time for low-income countries.

Dynamic Impacts of Economic Growth and Forested Area on Carbon Dioxide Emissions in Malaysia

This study measures the relationship and dynamic impacts of economic growth and forested area on carbon dioxide (CO2) emissions in Malaysia. Time series data over the period of 1990 to 2016 were used by employing the dynamic ordinary least squared (DOLS) approach. The results of DOLS estimation indicate that the coefficient of economic growth is positive and significant with CO2 emissions, meaning that RM1 million increase in gross domestic product (GDP) is associated with an increase in CO2 emissions of 0.931 kilo tons. Instead, the long-run coefficient of forested area found negative and significant, which implies that declining one hectare of forested area (i.e., deforestation) has an impact of three kilo tons of CO2 emissions rise in Malaysia. Our study findings indicate that economic growth and deforested area have an adverse effect on Malaysia’s carbon emissions where GDP growth fosters carbon emissions at a faster rate. Thus, the effective implementation of policy measures and economic instruments including afforestation and reforestation, forest conservation, sustainable forest management, REDD+ (reducing emissions from deforestation and forest degradation plus) mechanism and other emission reduction mechanisms inter alia could be useful for reducing carbon emissions while decreasing deforestation and maintaining the long-term economic growth in Malaysia.

Economic Complexity and Ecological Footprint: Evidence from the Most Complex Economies in the World

The paper introduces economic complexity as an explanatory variable of ecological footprint change, along with income per capita and fossil fuel energy consumption. The link between the ecological footprint and economic complexity is explored within a panel of 48 complex economies over the period 1995–2014. The panel analysis is based on the annual data series of the economic complexity index (ECI), fossil fuel energy consumption, income per capita, and the ecological footprint of production. The econometrical analysis, based on second-generation unit root tests, cointegration testing, and estimation of fully modified ordinary square (FMOLS) and dynamic ordinary least square (DOLS) models in a heterogeneous panel of countries, revealed a validated positive long-run association between the ecological footprint of production as dependent variable and the economic complexity index, gross domestic product per capita, and fossil fuel energy consumption. The paper sheds light on the critical situation of environmental sustainability, taking into consideration that 75% of countries under examination are in ecological deficit.

Changes in Energy Supplies in the Countries of the Visegrad Group

The main purpose of the work is to identify and present the current situation and changes in the volume of energy supplies in the countries of the Visegrad Group. The specific objectives of the article are to determine the degree of concentration of energy supply sources in the countries of the Visegrad Group, the directions of their changes, types of energy used and changes in this area, establishing the correlation between the volume of energy supplies and changes in the economic situation in V4 countries. The period of research covers the years 1990–2018. The sources of materials were the literature on the subject, with the data from Eurostat. The following methods were used for the analysis and presentation of materials: descriptive, tabular, graphical, dynamics indicators with a constant basis; Gini concentration coefficient; concentration analysis using the Lorenz curve; coefficient of variation; Pearson’s linear correlation coefficient. It was found that, of a high concentration of energy supplies from one or more sources in all countries of the Visegrad Group, the largest was in Poland and the lowest were in Hungary and the Czech Republic. In each of these countries, the economy was transforming and there was also a gradual diversification of energy sources.

Investigating the EKC hypothesis for China: the role of economic complexity on ecological footprint

This empirical study aims to test the validity of the environmental Kuznets curve (EKC) hypothesis for China within the framework of (Narayan and Narayan Energy Policy 38(1):661-666, 2010) approach. To this end, the study employs a recently developed Fourier ARDL procedure and time-varying causality test over the period 1965-2016 to analyze the short- and long-term relationships between economic growth, economic complexity index, energy consumption, and ecological footprint. The findings of the Fourier ARDL procedure confirm the existence of cointegration among the series. Moreover, the results of this study demonstrate that energy consumption and ecological complexity increase ecological footprint in both the short- and long term. However, the short-term elasticity of economic growth is smaller than the long-term elasticity, implying that the EKC hypothesis is not valid for China. This finding is robust as it is confirmed by the time-varying causality test. The overall results illustrate that economic complexity has an increasing impact on ecological footprint, and economic growth is not effective to solve environmental problems in China. Therefore, the Chinese government should encourage a more environmentally friendly production process and cleaner technologies in exports to reduce environmental pollution.