Exploring the impacts of economic policy uncertainty, natural resources, and energy structure on ecological footprints: evidence from G-10 nations.

Abstract

The role of energy and natural resources rent has been studied in the literature but very few research works investigated the impacts of economic policy uncertainty and energy structure on ecological footprints (EFs) in the group of ten G-10 countries. Therefore, this research is designed to probe the impacts of economic policy uncertainty (EP), natural resources rent, energy structure, economic growth, and total factor productivity on EF. The annual data for 1995-2018 is analyzed by adopting second-generation methods. The empirical results from the CS-ARDL unveiled that EP is significantly and positively related to EF, indicating that EP is not environmentally friendly in these nations. A 1% increase in EP contributes to EF by 0.025% in the long run. In addition, the results show that natural resource rents and energy structure positively contribute to mitigating EF by 0.012% and 0.095% respectively, while economic growth increases EF by 0.237%. Based on the empirical results, this work suggests addressing the economic policy uncertainty and economic progress to lower ecological deprivation can be a viable solution to attain sustainable development goals. This work recommends adopting feasible economic policies with sound efforts. For this purpose, the economic sector has to be strong enough with sustainable production. They should ensure the supply of continuous renewable energy to the economic sector.