Dynamic impact of trade policy, economic growth, fertility rate, renewable and non-renewable energy consumption on ecological footprint in Europe

Abstract

Climate change mitigation has become the central theme for many policy initiatives, as such, the European Union (EU) member countries are working assiduously to achieve the emission targets. To provide policy direction in achieving the emission targets, this study investigated the drivers essential to attaining the Sustainable Development Goals in regards to reducing environmental pollution in EU member countries. A balanced panel of 16-EU countries from 1997 to 2014 was estimated with Panel Pool Mean Group Autoregressive distributive lag (PMG-ARDL) model. The study traced the equilibrium relationship between ecological footprint, real gross domestic product, trade openness, fertility rate, renewable and non-renewable energy consumption — suggested by both Kao and Pedroni cointegration tests. The PMG-ARDL analysis confirmed the role of non-renewable energy consumption in depleting environmental quality while renewable energy consumption was found to improve environmental sustainability. Interestingly, the unexpected long-run fertility-ecological footprint nexus was connected with the divergent fertility rate information of the EU member countries. Although, country-specific policy approach is essential, however, such a framework should be compatible with the region's overall Sustainable Development Goals. The call for diversification of existing energy portfolios by either incorporating or enhancing renewable energy technologies is essential to sustain the current success strides of most member states. Thus, the EU needs to strengthen its commitments to achieving the emission targets by decarbonizing and sustaining its economic growth trajectory.