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

Abstract

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.

Greening the Brazil, Russia, India, China and South Africa (BRICS) economies: Assessing the impact of electricity consumption, natural resources, and renewable energy on environmental footprint

“…The electricity production from the use of oil and gas produces carbon emission which is released into environment, consequently triggering environmental deterioration. This result support to the findings of Langnel andAmegavi (2020), Shahbaz et al, andAdedoyin (2022).…”

“…A 1 percent rise in electricity consumption raises the EFP by 0.19% and 0.28% in the case of Dk‐SE and FMOLS, respectively. These outcomes are similar to the findings of Langnel and Amegavi (2020), Shahbaz et al, and Satrovic and Adedoyin (2022). Moreover, RENG has a negative impact on EFP.…”

“…The influence of electricity on CO 2 was evaluated, and the study result disclosed the emissions increase of the role of electricity usage. Likewise, the study by Lean and Smyth (2010) utilizing the ASEAN nations disclosed the ecological quality mitigating role of electricity usage, consistent with the study of Shahbaz et al Moreover, using the Top ten most complex nations, the research of Satrovic and Adedoyin, (2022) utilizing data spanning from 1998 to 2017 and utilizing the PMG and FMOLS highlighted the emissions intensification role of electricity usage. Likewise, Kirikkaleli et al (2022) for Chile and Langnel and Amegavi, (2020) for Ghana nation in their study respectively reported that the expansion of CO 2 in the selected nations is attributed to the growth of electricity consumption.…”

Economic Development and Environmental Sustainability in the GCC Countries: New Insights Based on the Economic Complexity

“…The vast majority of EKC research has focused on GDP volume as a proxy for economic development, with minimal attention given to the structure of GDP's environmental impact [9,10]. Real GDP, however, does not fully reflect structural changes, posing an environmental constraint that extends beyond production volume [11]. Ref.…”

“…Second, they are geographically and economically convergent (e.g., similar economic structure, high reliance on nonrenewable energy sources, and reliance on oil revenues); and third, they are all major petroleum exporters with abundant natural resources, resulting in rapid growth at the expense of series environmental repercussions. In comparison to the rest of the world, Gulf countries have a relatively low complex export basket but a relatively high real GDP per capita [11]. Thus, embracing new factors that help the region better manage its natural capital and grow its economic progress while simultaneously enhancing environmental quality is an inevitable prerequisite for the region's sustainable development.…”