Essays on Economics of Green Sustainability and Environmental Quality - Insight from Developing Economies

Abstract

Anthropogenic activities have intensely converted the earth's ecosystem and resulted in major environmental changes over the last century or so. The widespread interference of human activities has resulted in major issues such as environmental pollution, land degradation, global warming/climate change, a scarcity of potable water supply, and biodiversity loss. Possible green solutions, such as the use of renewable energy and efficient technology, are gaining importance in order to lessen or remediate the harmful effects of anthropogenic activities, ensuring environmental sustainability. This study focuses on the four essays on energy and environmental economics in developing countries. The first essay examines the relationship between renewable, non-renewable energy, natural resources, human capital, and globalization on ecological footprint from 1990-2016 for developing countries. This study applies both static and dynamic econometrics approach to analyze the results. The findings revealed that economic growth, non renewable energy, natural resources, and urbanization are inducing the ecological footprint of developing countries and reducing the environment's quality. To cope up with this situation, developing countries are bound to use more fossil fuel energy. The second essay examines the dynamic impact of urbanization, economic structure, technological innovation, and population density on developing countries' ecological footprint and air quality (PM2.5) from 1990 to 2017. The study uses other variables like population density, energy consumption, and life expectancy to find out the long-run relationship among variables. We apply Westerlund co-integration, Mean Group (MG) and Pooled Mean Group (PMG) technique to ascertain the variables' long run and short run associations. The results reveal that, economic growth increases ecological footprint in these in long run. Similarly, the coefficient of industrialization is positive and significantly related to ecological footprint. However, the service sector negatively affects the ecological footprint in developing countries. Population density, urbanization, energy consumption, and life expectancy positively affect ecological footprint. Further, in the case of PM2.5, the results suggest that economic growth and industrial sectors have higher magnitude effects on the PM2.5 than the other variables. The service sector reduces PM2.5, whereas the coefficient value is not significant, but the agriculture sector positively influences PM2.5. Similarly, population density and urbanization contribution to PM2.5 are positive and significant. Hence, these countries should focus more on the investment in the renewable energy sector and make stringent environmental policy for protecting the nations from environmental issues. The third essay examines the role of corruption, green energy, trade, innovation, natural resources, and ICT on carbon dioxide (CO2) emissions in developing countries from 2000 to 2018 in developing economies. This study applies static econometrics technique like OLS, fixed effect and random effect model. However, for the analysis of main results SGMM is applied. It finds that the increase in corruption in developing countries adversely affects the environment, increasing CO2 emissions. Similarly, the interaction effect between corruption and natural resources increases CO2 emissions. On the other hand, corruption and green energy jointly decrease environmental quality. It finds that green energy and innovation can help lower carbon emissions. Furthermore, the interaction between corruption with innovation and information and communication technology (ICT) increases environmental quality in the long run. The findings also support the presence of the EKC hypothesis over the sample period. The findings imply that developing countries should raise their investment in green energy generation and stimulate green innovation in high-energy-intensive sectors to meet the Sustainable Development Goals (SDGs). Lastly, the fourth essay examines the nexus between financial development and the composite environmental quality index (CEQI); this also determines the interaction between financial development and other variables like economic growth, trade openness and renewable energy consumption. PSTR is used to determine the long run results by taking financial development as a threshold variable. This technique also solves the problem of endogeneity issue in the model. The results reveal a positive and statistically significant relationship between financial development and environmental quality in the lower regime of financial development. At the same time, it helps to reduce environmental pollution in the upper regime. Similarly, in the lower regime trade openness, FDI and population increase environmental pollution in developing countries. However, it reduces environmental pollution in the higher regime. When a country matures, the government considers environmental protection and allocates funds to build efficient technology to produce more products in the same amount of time. It may result in the country becoming self-sufficient in the production sector, which may reduce environmental pollution. However, in the lower regime, renewable energy reduces environmental pollution in the sampled countries.