Renewable, non-renewable energy consumption, economic growth, trade openness and ecological footprint: Evidence from organisation for economic Co-operation and development countries

Destek, Mehmet and Sinha, Avik (2020): Renewable, non-renewable energy consumption, economic growth, trade openness and ecological footprint: Evidence from organisation for economic Co-operation and development countries. Published in: Journal of Cleaner Production , Vol. 242, (2020): p. 118537.

Abstract

The purpose of this study is to examine the validity of Environmental Kuznets Curve hypothesis for ecological footprint with the role of renewable energy use, non-renewable energy use and trade openness in 24 Organisation for Economic Co-operation and Development countries. For this purpose, we investigate the period from 1980 to 2014 using with second generation panel data methodologies which allow to cross-sectional dependence among countries. The group-mean results show that the inverted U-shaped Environmental Kuznets Curve hypothesis does not hold in Organisation for Economic Co-operation and Development countries because we found the U-shaped relationship between economic growth and ecological footprint. In addition, it is concluded that increasing renewable energy consumption reduces ecological footprint and increasing non-renewable energy consumption increases environmental degradation.

• Item Type: MPRA Paper
• Language: English
• Keywords: Ecological footprint; Environmental Kuznets curve; Renewable energy
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution ; Water Pollution ; Noise ; Hazardous Waste ; Solid Waste ; Recycling

References

Ahmad, N., Du, L., Lu, J., Wang, J., Li, H. Z., Hashmi, M. Z., 2017. Modelling the CO2 emissions and economic growth in Croatia: is there any environmental Kuznets curve?. Energy, 123, 164-172.

Akella, A.K., Saini, R.P., Sharma, M.P., 2009. Social, economical and environmental impacts of renewable energy systems. Renewable Energy, 34(2), 390-396.

Al-Mulali, U., Ozturk, I., 2015. The effect of energy consumption, urbanization, trade openness, industrial output, and the political stability on the environmental degradation in the MENA (Middle East and North African) region. Energy, 84, 382-389.

Al-Mulali, U., Weng-Wai, C., Sheau-Ting, L., Mohammed, A.H., 2015. Investigating the environmental Kuznets curve (EKC) hypothesis by utilizing the ecological footprint as an indicator of environmental degradation. Ecological Indicators, 48, 315-323.

Al-Mulali, U., Solarin, S.A., Sheau-Ting, L., Ozturk, I., 2016. Does moving towards renewable energy causes water and land inefficiency? An empirical investigation. Energy Policy, 93, 303-314.

Apergis, N., Payne, J.E., 2012. Renewable and non-renewable energy consumption-growth nexus: Evidence from a panel error correction model. Energy Economics, 34(3), 733-738.

Apergis, N., 2016. Environmental Kuznets curves: New evidence on both panel and country-level CO2 emissions. Energy Economics, 54, 263-271.

Appiah, K., Du, J., Yeboah, M., Appiah, R., 2019. Causal correlation between energy use and carbon emissions in selected emerging economies—panel model approach. Environmental Science and Pollution Research, 26(8), 7896-7912.

Aşıcı, A.A., Acar, S., 2016. Does income growth relocate ecological footprint?. Ecological Indicators, 61, 707-714.

Aşıcı, A.A., Acar, S., 2018. How does environmental regulation affect production location of non-carbon ecological footprint?. Journal of Cleaner Production, 178, 927-936.

Bagliani, M., Bravo, G., Dalmazzone, S., 2008. A consumption-based approach to environmental Kuznets curves using the ecological footprint indicator. Ecological Economics, 65(3), 650-661.

Basel Convention, 2018. The Country-Led Initiative. Available at: http://www.basel.int/Implementation/CountryLedInitiative/tabid/1339/Default.aspx

Breusch, T.S., Pagan, A.R., 1979. A Simple Test for Heteroskedasticity and Random Coefficient Variation. Econometrica, 47, 1287-1294.

Carbajo, R., Cabeza, L.F., 2018. Renewable energy research and technologies through responsible research and innovation looking glass: Reflexions, theoretical approaches and contemporary discourses. Applied Energy, 211, 792-808.

Caviglia-Harris, J.L., Chambers, D., Kahn, J.R., 2009. Taking the “U” out of Kuznets: A comprehensive analysis of the EKC and environmental degradation. Ecological Economics, 68(4), 1149-1159.

Charfeddine, L., 2017. The impact of energy consumption and economic development on Ecological Footprint and CO2 emissions: Evidence from a Markov Switching Equilibrium Correction Model. Energy Economics, 65, 355-374.

Charfeddine, L., Mrabet, Z., 2017. The impact of economic development and social-political factors on ecological footprint: A panel data analysis for 15 MENA countries. Renewable and Sustainable Energy Reviews, 76, 138-154.

Chen, B., Chen, G.Q., 2007. Modified ecological footprint accounting and analysis based on embodied exergy—a case study of the Chinese society 1981–2001. Ecological Economics, 61(2), 355-376.

Chen, B., Chen, G.Q., Yang, Z.F., Jiang, M.M., 2007. Ecological footprint accounting for energy and resource in China. Energy Policy, 35(3), 1599-1609.

Chen, C.Z., Lin, Z.S., 2008. Multiple timescale analysis and factor analysis of energy ecological footprint growth in China 1953–2006. Energy Policy, 36(5), 1666-1678.

Čuček, L., Klemeš, J.J., Kravanja, Z., 2012. A review of footprint analysis tools for monitoring impacts on sustainability. Journal of Cleaner Production, 34, 9-20.

Deakin, M., Reid, A., 2018. Smart cities: Under-gridding the sustainability of city-districts as energy efficient-low carbon zones. Journal of Cleaner Production, 173, 39-48.

Destek, M.A., Ulucak, R., Dogan, E., 2018. Analyzing the environmental Kuznets curve for the EU countries: the role of ecological footprint. Environmental Science and Pollution Research, 25(29), 29387-29396.

Deutsch, L., Jansson, Å., Troell, M., Rönnbäck, P., Folke, C., Kautsky, N., 2000. The ‘ecological footprint’: communicating human dependence on nature’s work. Ecological Economics 32, 351-355.

Dong, K., Sun, R., Jiang, H., Zeng, X., 2018. CO2 emissions, economic growth, and the environmental Kuznets curve in China: What roles can nuclear energy and renewable energy play?. Journal of Cleaner Production, 196, 51-63.

Esteve, V., Tamarit, C., 2012. Is there an environmental Kuznets curve for Spain? Fresh evidence from old data. Economic Modelling, 29(6), 2696-2703.

Galli, A., 2015. On the rationale and policy usefulness of Ecological Footprint Accounting: The case of Morocco. Environmental Science & Policy, 48, 210-224.

Grossman, G.M., Krueger, A.B., 1991. Environmental Impacts of a North American Free Trade Agreement (No. w3914). National Bureau of Economic Research.

He, Y., Lin, B., 2019. Investigating Environmental Kuznets Curve from an Energy Intensity Perspective: Empirical evidence from China. Journal of Cleaner Production, 234, 1013-1022.

Isman, M., Archambault, M., Racette, P., Konga, C. N., Llaque, R. M., Lin, D., ... Ouellet-Plamondon, C.M., 2018. Ecological Footprint assessment for targeting climate change mitigation in cities: A case study of 15 Canadian cities according to census metropolitan areas. Journal of Cleaner Production, 174, 1032-1043.

Jaunky, V. C., 2011. The CO2 emissions-income nexus: evidence from rich countries. Energy Policy, 39(3), 1228-1240.

Junxian, L., Jingya, Q., Kai, Z., 2019. Is China's Development Conforms to the Environmental Kuznets Curve Hypothesis and the Pollution Haven Hypothesis?. Journal of Cleaner Production, 234, 787-796.

Kao, C., 1999. Spurious regression and residual-based tests for cointegration in panel data. Journal of Econometrics, 90, 1-44.

Kissinger, M., Fix, J., Rees, W.E., 2007. Wood and non-wood pulp production: Comparative ecological footprinting on the Canadian prairies. Ecological Economics, 62(3), 552-558.

Kissinger, M., Haim, A., 2008. Urban hinterlands—the case of an Israeli town ecological footprint. Environment, Development and Sustainability, 10(4), 391-405.

Koenker, R., 1981. A Note on Studentizing a Test for Heteroskedasticity. Journal of Econometrics, 17, 107-112.

Kuznets, S., 1955. Economic growth and income inequality. American Economic Review, 45(1), 1-28.

Li, J.X., Chen, Y.N., Xu, C.C., Li, Z., 2019. Evaluation and analysis of ecological security in arid areas of Central Asia based on the emergy ecological footprint (EEF) model. Journal of Cleaner Production, 235, 664-677.

Li, Z., Ju, M.T., Liu, W., Shao, C.F., 2007. Dynamic measurement of ecological footprint of energy resources and its economic efficiency in last ten years, China. Resources Science, 29(6), 54-59.

Lozano, F.J., Lozano, R., 2018. Assessing the potential sustainability benefits of agricultural residues: biomass conversion to syngas for energy generation or to chemicals production. Journal of Cleaner Production, 172, 4162-4169.

Lozano, F.J., Lozano, R., Freire, P., Jiménez-Gonzalez, C., Sakao, T., Ortiz, M.G., ... Viveros, T., 2018. New perspectives for green and sustainable chemistry and engineering: Approaches from sustainable resource and energy use, management, and transformation. Journal of Cleaner Production, 172, 227-232.

Ma, S., Dai, J., Wen, H., 2019. The influence of trade openness on the level of human capital in China: on the basis of environmental regulation. Journal of Cleaner Production, 225, 340-349.

McDermott, K., Kurucz, E.C., Colbert, B.A., 2018. Social entrepreneurial opportunity and active stakeholder participation: Resource mobilization in enterprising conveners of cross-sector social partnerships. Journal of Cleaner Production, 183, 121-131.

Moore, J., Kissinger, M., Rees, W.E., 2013. An urban metabolism and ecological footprint assessment of Metro Vancouver. Journal of Environmental Management, 124, 51-61.

Narayan, P. K., Narayan, S., 2010. Carbon dioxide emissions and economic growth: Panel data evidence from developing countries. Energy Policy, 38(1), 661-666.

Olale, E., Ochuodho, T.O., Lantz, V., El Armali, J., 2018. The environmental Kuznets curve model for greenhouse gas emissions in Canada. Journal of Cleaner Production, 184, 859-868.

Organisation for Economic Co-operation and Development (OECD), 2008. OECD Environmental Outlook to 2030. Available at: http://www.oecd.org/env/indicators-modelling-outlooks/40200582.pdf

Ozturk, I., Al-Mulali, U., Saboori, B., 2016. Investigating the environmental Kuznets curve hypothesis: the role of tourism and ecological footprint. Environmental Science and Pollution Research, 23(2), 1916-1928.

Pan, H., Zhuang, M., Geng, Y., Wu, F., Dong, H., 2019. Emergy-based ecological footprint analysis for a mega-city: The dynamic changes of Shanghai. Journal of Cleaner Production, 210, 552-562.

Pedroni, P., 1999. Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics, 61, 653-670.

Pesaran, M.H., 2004. General diagnostic tests for cross section dependence in panels, Cambridge Working Papers in Economics 35 Faculty of Economics, University of Cambridge.

Pesaran, M.H., 2006. Estimation and inference in large heterogeneous panels with a multifactor error structure. Econometrica, 74(4), 967-1012.

Pesaran, M.H., 2007. A simple panel unit root test in the presence of cross‐section dependence. Journal of Applied Econometrics, 22(2), 265-312.

Rashid, A., Irum, A., Malik, I. A., Ashraf, A., Rongqiong, L., Liu, G., ... Yousaf, B., 2018. Ecological footprint of Rawalpindi; Pakistan’s first footprint analysis from urbanization perspective. Journal of Cleaner Production, 170, 362-368.

Rees, W.E., 1992. Ecological footprints and appropriated carrying capacity: what urban economics leaves out. Environment and Urbanization, 4(2), 121-130.

Ribeiro, F., Ferreira, P., Araújo, M., Braga, A.C., 2018. Modelling perception and attitudes towards renewable energy technologies. Renewable Energy, 122, 688-697.

Sarkodie, S.A., Strezov, V., 2018. Empirical study of the Environmental Kuznets curve and Environmental Sustainability curve hypothesis for Australia, China, Ghana and USA. Journal of Cleaner Production, 201, 98-110.

Shahbaz, M., Sinha, A., 2019. Environmental Kuznets Curve for CO2 Emissions: A Literature Survey. Journal of Economics Studies, 46(1), 106-168.

Sinha, A., 2017. Inequality of renewable energy generation across OECD countries: a note. Renewable and Sustainable Energy Reviews, 79, 9-14.

Sinha, A., Shahbaz, M., Balsalobre, D., 2017. Exploring the Relationship between Energy Usage Segregation and Environmental Degradation in N–11 Countries. Journal of Cleaner Production, 168, 1217–1229.

Sinha, A., Gupta, M., Shahbaz, M., Sengupta, T., 2019. Impact of corruption in public sector on environmental quality: Implications for sustainability in BRICS and next 11 countries. Journal of Cleaner Production, 232, 1379-1393.

Stern, D. I., 2004. The rise and fall of the environmental Kuznets curve. World development, 32(8), 1419-1439.

Stöglehner, G., 2003. Ecological footprint—a tool for assessing sustainable energy supplies. Journal of Cleaner Production, 11(3), 267-277.

Templet, P.H., 2000. Externalities, subsidies and the ecological footprint: an empirical analysis. Ecological Economics, 32(3), 381-383.

Ulucak, R., Bilgili, F., 2018. A reinvestigation of EKC model by ecological footprint measurement for high, middle and low income countries. Journal of Cleaner Production, 188, 144-157.

United Nations Development Programme (UNDP), 2017. Sustainable Development Goals. Available at: http://www.undp.org/content/undp/en/home/sustainable-development-goals.html

Van Fan, Y., Varbanov, P.S., Klemeš, J.J., Nemet, A., 2018. Process efficiency optimisation and integration for cleaner production. Journal of Cleaner Production, 174, 177-183.

Wackernagel, M., Monfreda, C., 2004. Ecological footprints and energy. In: Cleveland, C.J. (Ed.), Encyclopedia of Energy, Vol. 2. Elsevier, Amsterdam, pp. 1-11.

Wackernagel, M., Onisto, L., Bello, P., Linares, A.C., Falfán, I.S.L., Garcıa, J. M., ... & Guerrero, M.G.S., 1999. National natural capital accounting with the ecological footprint concept. Ecological Economics, 29(3), 375-390.

Wackernagel, M., Rees, W.E., 1996. Our Ecological Footprint: Reducing Human Impact on the Earth. New Society, Gabrioala, BC, Canada.

Wackernagel, M., Rees, W.E., 1997. Perceptual and structural barriers to investing in natural capital: economics from an ecological footprint perspective. Ecological Economics, 20(1), 3-24.

Wackernagel, M., Silverstein, J., 2000. Big things first: focusing on the scale imperative with the ecological footprint. Ecological Economics, 32(3), 391-394.

Wang, Y., Kang, L., Wu, X., Xiao, Y., 2013. Estimating the environmental Kuznets curve for ecological footprint at the global level: A spatial econometric approach. Ecological Indicators, 34, 15-21.

Westerlund, J., 2007. Testing for error correction in panel data. Oxford Bulletin of Economics and Statistics, 69, 709-748.

White, H., 1980. A Heteroskedasticity-consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity. Econometrica, 48, 817-838.

Wiedmann, T., Barrett, J., 2010. A review of the ecological footprint indicator—perceptions and methods. Sustainability, 2(6), 1645-1693.

Yang, L., Xia, H., Zhang, X., Yuan, S., 2018. What matters for carbon emissions in regional sectors? A China study of extended STIRPAT model. Journal of Cleaner Production, 180, 595-602.

Yao, S., Zhang, S., Zhang, X., 2019. Renewable energy, carbon emission and economic growth: A revised environmental Kuznets Curve perspective. Journal of Cleaner Production, 235, 1338-1352.

Zrelli, M.H., 2017. Renewable energy, non-renewable energy, carbon dioxide emissions and economic growth in selected Mediterranean countries. Environmental Economics and Policy Studies, 19(4), 691-709.

Zhao, S., Li, Z., Li, W., 2005. A modified method of ecological footprint calculation and its application. Ecological Modelling, 185(1), 65-75.