Leveraging on structural change and ISO 14001 certification to mitigate ecological footprint in Shanghai cooperation organization nations

Abstract

The Shanghai Cooperation Organizations (SCO) nations are suffering from hydro-climatic threats and permafrost thaw, with issues related to floods upsurging. Existing studies on the SCO have mainly focused on ethnic separatism and the fight against regional terrorism. Recently,the need for structural adjustment in economic activities and ISO 14001 certification has gained attention among academicians yet no study has examined their nonlinear effects on ecological footprint. Using data from 2003 to 2019 and the Fully Modified OLS focusing on the eight permanent SCO nations, this study tests the environmental Kuznets Curve (EKC) validity and investigates the linear and nonlinear effects of structural change and ISO 14001 certification on ecological footprint. The empirical results confirm the EKC hypothesis. Next, enough evidence has been found that the nature of current structural reform is inadequate to improve their environmental quality, and a shift from short-term, sector-specific reforms to longer-term, holistic solutions will improve SCO environmental quality by 0.092%. Finally, doubling ISO 14001 certifications will improve the environmental quality by 0.008%. As recommendations, policymakers in developing economies should adopt the EKC postulate as the theoretical basis for policies favouring economic growth. Also, to encourage ISO 14001 implementation, there should be awareness creation about its benefits through workshops and conferences, and governments should provide financial incentives to encourage firms to implement the policy.