The more effective option to combat environmental degradation: Energy efficiency vs. renewable energy vs. natural gas?

Abstract

Environmental degradation has become one of the major challenges facing the global community. This paper aims to explore the more effective options to combat environmental degradation by investigating the linearity and nonlinearity (trade openness set as a threshold variable) of energy efficiency, natural gas, renewable energy and ecological footprint. To this end, linear and non-linear panel models were constructed using panel data from 60 countries. The results of the linear analysis show that improving energy efficiency, and increasing the consumption of natural gas and renewable energy are conducive to inhibiting environmental degradation. Energy efficiency has the most significant negative correlation with ecological footprint, followed by renewable energy, and then natural gas, implying that improving energy efficiency and developing renewable energy is a more effective strategy to combat environmental degradation. The results of the nonlinear analysis show that there are threshold effects of trade openness between energy efficiency and ecological footprint, and between renewable energy and ecological footprint. The negative impact of both renewable energy and energy efficiency on the ecological footprint increases when trade openness exceeds the threshold. This suggests that, in terms of curbing environmental degradation, enhancing trade openness may further increase the negative impacts of energy efficiency and renewable energy on ecological footprint. At the same time, this confirms the positive role of trade openness in environmental protection.