A threshold approach to sustainable development: Nonlinear relationship between renewable energy consumption, natural resource rent, and ecological footprint

Abstract

All over the world, humankind and nature are paying off economic development's opportunity cost through accelerated environmental degradation. Renewable energy is the best option to control and minimize environmental degradation for sustainable development. This study's primary motive is to examine the nonlinear relationship between renewable energy consumption, natural resource rent, and ecological footprint in the context of the world's top 15 renewable energy consumption economies to achieve sustainable development. Panel time-series data from 1996 to 2018 is focused on concluding the study. Panel Smooth Transition Model is used to explore the nonlinear relationship and transition between the low and high regimes because of the nonlinear behavior. The study's results suggest a negative association between renewable energy consumption and ecological footprint and a positive relationship between natural resource rent and ecological footprint in both low and high regimes in the case of these 15 economies. It is highly recommended that the nations must shift their energy consumption policies towards renewable energy sources by investing in renewable energy technology and research for a more sustainable development.