open access publication

Article, 2024

Environmental policy stringency and ecological footprint linkage: Mitigation measures of renewable energy and innovation

Energy Economics, ISSN 0140-9883, 1873-6181, Volume 136, Page 107721, 10.1016/j.eneco.2024.107721

Contributors

Sohag, Kazi 0000-0002-0976-2357 [1] Husain, Shaiara 0000-0002-7228-3869 [2] Soytas, Ugur 0000-0002-6143-289X (Corresponding author) [3]

Affiliations

  1. [1] Ural Federal University
    2. [NORA names: Russia; Europe, Non-EU];
  2. [2] Curtin University
    3. [NORA names: Australia; Oceania; OECD];
  3. [3] Technical University of Denmark
    4. [NORA names: DTU Technical University of Denmark; University; Denmark; Europe, EU; Nordic; OECD]

Abstract

We scrutinize the environmental policies' efficacy in reducing ecological footprint by interweaving two other vibrant parameters of environmental degradation mitigation, i.e., renewable energy sources and innovation. To this end, we apply a Cross-Sectional Autoregressive Distributed Lags (CS-ARDL) approach to analyze panel time-series data (1990–2018) in the context of OECD countries. Our analysis shows that environmental policy significantly reduces ecological footprint through renewable energy and innovation channels. Our findings also support the idea that environmental policy's effectiveness is conditional on countries' bio-capacity surplus/deficit and the level of industrialization. The overall findings hold up well in the presence of cross-sectional dependence, short-run heterogeneity, and long-run homogeneity under the respective sample. Our findings underscore the need for more stringent environmental policies, supported by technological advancements and clean energy initiatives, to mitigate the impact of human economic activities on natural resources.

Keywords

CS-ARDL, OECD countries, activity, advances, analysis, channel, clean energy initiatives, context, context of OECD countries, countries, cross-sectional dependence, data, degradation mitigation, dependence, ecological footprint, economic activity, effect, efficacy, energy, energy initiatives, environmental policy, environmental policy effectiveness, environmental policy stringency, findings, footprint, heterogeneity, homogeneity, human economic activity, i., impact, impact of human economic activity, industry, initiation, innovation, innovative channels, level of industrialization, levels, linkage, long-run homogeneity, mitigation, mitigation measures, natural resources, panel, panel time-series data, policy, policy effects, policy efficacy, policy stringency, presence, presence of cross-sectional dependence, reduced ecological footprint, renewable energy, resources, samples, stringency, surplus/deficit, technological advances

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