The dynamic influence of renewable energy, trade openness, and industrialization on the sustainable environment in G-7 economies

Economic development, accompanied by escalating energy demand in both developed and developing countries, has been unprecedented over the last two decades. The consumption of energy in G-7 countries is predominantly cleaner energy: which could have indispensable implications for sustainable economic growth. The recent literature investigating the energy-growth and the environment relationship for the G-7 region is inefficient in terms of estimation techniques or unique relationships to evaluate the environmental performance. Therefore, this study securitizes the impact of renewable energy, trade openness, industrialization, technology, and economic development on the ecological footprint in G-7 nations from 1990 to 2020 with the theoretical support of the STIRPAT model. The empirical estimations using CS-ARDL report that clean energy plays its role in mitigating environmental pollution in both the long and short run. More so, production and trade activities utilize more resources that impart their negative influence on the ecological quality. The industrialization has a direct and significant connection with the environment. Contrarily, technology has a favourable impact on ecological quality. To obtain robust results, this study applies the AMG panel approach and argues some policy implications for regulators to accomplish sustainable economic growth and carbon neutrality targets.

Automated summary

Economic development has led to increased energy demand, resulting in negative environmental impact. This study finds that clean energy plays a positive role in reducing environmental pollution, while production and trade activities have a negative influence on ecological quality. Industrialization is directly linked to the environment, while technology has a positive impact on ecological quality.