Green Growth, Environmental Quality, Energy Consumption Nexus in OECD Countries

Abstract

Sustainable economic development is desirably terrible for improving social welfare. It implies that economic development should not be at the cost of environmental degradation, but rather environmental sustainability should be maintained. This study has examined the green growth, environmental quality, and energy consumption nexus in 38 OECD countries using panel data from 1991 to 2020. We have estimated two models. The first model explores the impact of green growth on environmental quality and the second model probes the link between non-green growth and environmental degradation. For this purpose, the ARDL technique has been used to estimate the results. Green growth has not followed the environmental Kuznut Curve theory while Non-Green growth has validated the environmental Kuznut Curve theory. Furthermore, Environmentally friendly technological innovation, renewable energy consumption, environmental-related tax, and human capital turn out with negative signs while foreign direct investment and trade openness are positively related to environmental degradation. The study also suggests policies to decarbonize or minimize the emissions in the economies.