Journal Article

Do geopolitical risk and energy consumption contribute to environmental degradation? Evidence from E7 countries

Syed, Qasim Raza, Husnain, Muhammad Iftikhar ul, Khan, Muhammad Aamir, Bashir, Arooj

2022

Overview

Environmental degradation is frequently cited as one of the eminent issues in the modern era. To limit environmental degradation, prior literature discerns several macroeconomic, socio-economic, and institutional factors that affect environmental degradation. However, the relationship between geopolitical risk and environmental degradation is understudied in the previous literature. To fill this gap, the inquiry at hand aims to scrutinize the influence of geopolitical risk on environmental degradation for E7 countries while controlling the effect of renewable energy, non-renewable energy, and GDP. Further, we utilize both the ecological footprint and CO 2 emissions as proxies of environmental degradation and employ second-generation panel methods for robust findings. In addition to this, the present study uses augmented mean group (AMG) estimator to provide long-run relationship among the selected variables. The findings from the AMG estimator expound that there exists environmental Kuznets curve (EKC) for E7 countries. Moreover, renewable energy ameliorates environmental quality because it plunges both ecological footprint and CO 2 emissions. On the contrary, non-renewable energy consumption escalates both ecological footprint and CO 2 emissions. Finally, geopolitical risk tends to decrease CO 2 emissions as well as ecological footprint. Our findings deduce a few policy implications to replenish environmental quality. For instance, the share of renewables in the energy mix should be surged to ameliorate the environmental quality. Further, to control both the geopolitical risk and environmental degradation at the same time, policymakers should put forward reforms and initiatives (e.g., policies to escalate R&D, technological innovations, and tax exemptions on imports of renewables) that can help to improve environmental quality without affecting geopolitical risk. At times of low geopolitical risk, environmental degradation will surge; therefore, the rate of environmental control taxes should be increased by the policymakers.

• Publisher: Springer Berlin Heidelberg,Springer Nature B.V
• Subject: Aquatic Pollution / Carbon dioxide / Carbon dioxide emissions / Earth and Environmental Science / Ecological footprint / Ecological risk assessment / Ecology / Ecotoxicology / Emissions / energy / Energy consumption / Environment / Environmental Chemistry / Environmental control / Environmental degradation / Environmental Health / Environmental impact / Environmental Kuznets curve / Environmental quality / Environmental risk / Environmental science / Footprint analysis / Geopolitics / Imports / International relations / issues and policy / macroeconomics / nonrenewable resources / Organizational aspects / Political factors / Political risk / politics / Renewable energy / renewable energy sources / Renewable resources / Research Article / risk / Risk management / socioeconomics / Taxation / Technological change / Waste Water Technology / Water Management / Water Pollution Control