Do clean energy transition, environment degradation, and energy efficiency influence health expenditure: Empirical evidence from emerging countries

Abstract

The well-being of our environment and the overall health of population are increasingly at risk due to the pursuit of rapid economic growth by both developed and developing economies. This is exacerbated by the well-established connection between economic expansion and increased energy consumption. Because of this scenario of development, rapidly growing health expenditure is a matter of grave concern for households and governments. Every government is compelled to allocate a sufficient budget to improve people's health. Therefore, determinant factors of health expenditure in emerging nation became issue of discussion to understand the direction of further health expenditure. Therefore, major objective this study is investigating the impact of the clean energy transition, energy efficiency, aging population, natural resource depletion, and environmental degradation on health spending in 22 emerging economies for the period of 2000–2019. To fulfil this objective, Fully Modified Ordinary Least square (FMOLS) and Dynamic Ordinary Least Square (DOLS) techniques have been applied. Further to check causality among selected variables, Dumitrescu-Hurlin Granger Causality test has been employed. The outcomes of the Kao co-integration test predicted that a long-run association exists among natural resources depletion energy efficiency, renewable energy, aging population, and carbon dioxide (CO2) emissions with total health spending, government health spending, and private health spending in selected countries. Further results of FMOS found that the aging population, natural resources depletion, and CO2 release positively influence health spending in selected countries. The study results also indicated that improvement in energy efficiency and renewable energy use decrease health expenditure of emerging countries. Further, these results were also re-confirmed by the DOLS method. Further, the main conclusion of D-H findings predicted that feedback causality exists between environmental degradation and health spending.