Assessing the Dynamics of Ecological Footprint in Relation to Economic and Energy Factors: A Comparative Analysis of Finland and Japan

Abstract

The ecological footprint (EF) has a complex relationship with several key factors, including economic growth, nuclear energy, urban population, and renewables. The scope of this paper is to analyze the effect of renewables (REN), GDP per capita, urbanization (URB), and nuclear energy (NUK) on EF by means of the ARDL model for Finland and Japan. The ARDL long-run estimated coefficients are validated by supplementary tests, such as FMOLS, DOLS, and CCR. While Finland and Japan share similarities in education, technology, and quality of life, they differ significantly in geography, population density, cultural practices, economic structure, and historical backgrounds. The main results indicate that in the long term, REN and NUK exhibit a negative impact on EF, while GDP and URB exhibit a positive impact on EF for Finland. Additionally, REN, URB, and NUK exert a negative impact on EF, while GDP exerts a positive impact on EF for Japan. The ECT of − 1.96 for Finland indicates a very fast and strong correction towards equilibrium in the EF following any short-term disturbances. Furthermore, an ECT of − 1.01 in the ARDL model for Japan indicates a very fast adjustment of the EF to its long-term equilibrium following any short-term disturbances caused by changes in REN, GDP, URB, or NUK. Our research proposes some policy implications for both economies. Its main contributions enhance the understanding of the complex relationships between economic growth, energy sources, urbanization, and environmental impact, providing guidance for sustainable development policies.