Environmental sustainability and biomass energy consumption through the lens of pollution Haven hypothesis and renewable energy-environmental kuznets curve

Abstract

This article examines the relationship between foreign direct investment, economic growth, natural resources, urbanization, biomass energy usage, and ecological footprint in 87 middle-income countries using data spanning 1990 to 2017. The Environmental Kuznets Curve hypothesis (EKC), the Renewable Energy-EKC, and the Pollution Haven Hypothesis (PHH) were tested by employing the Augmented mean group and Dumitrescu-Hurlin causality test. The empirical results show the inverted U-shaped link between economic growth and ecological footprint that demonstrates the existence of the EKC hypothesis. The empirical findings support the PHH since increasing foreign direct investment is the cause of the increased ecological footprint in middle-income countries. The urbanization process and natural resources put much strain on the environment's long-term viability. Furthermore, the findings demonstrated an inverted U-shaped association between biomass energy usage and economic growth, confirming the Renewable Energy-EKC. According to the findings, urbanization and foreign direct investment are crucial determinants of biomass energy usage. These results urge governments to offer comprehensive economic and energy strategies for the sustainability of the ecosystem and to meet the SDG targets.