Environmental Challenges, Innovative-based human capital, and Urbanization in Developing Countries: The Role of (non)linear economic structure and Energy Dynamics.

Abstract

Researchers examined the practicality of innovative Human Capital (IHC), urbanization, linear and nonlinear growth, and energy dynamics in pollution control. However, the claim cannot be sufficiently supported by the available studies. The current study examines the impacts of IHC, growth (with a non-linearity), renewable energy (RE), and Non-RE (NRE), as well as urbanization, on environmental quality (EQ) to fill the gap that exists in the field and provide support for both theoretical and empirical frameworks. Panel data for the seven developing economies from 1990 to 2020 are used in this analysis. The results of the CS-ARDL show that IHC, growth (with a non-linearity), RE, NRE, and EQ have long-run and short-run relationships. Short- and long-term results show that IHC, non-linear growth (EG-SQ), and RE can improve EQ since they help lower carbon emissions (CO2em). Conversely, linear EG, NRE, and urbanization make EQ worse. The AMG confirms the results of the CS-ARDL, while Dumitrescu and Hurlin's (D-H) method is used to examine the pairwise relationships between the variables. The findings suggest that IHC, EG, NRE, and urbanization policies can shed light on changes in EQ without having the opposite effect. Furthermore, the link between these variables and the influence of RE on EQ raises the possibility of the opposite effects. These results offer valuable insights for policymakers to develop a comprehensive set of measures to enhance EQ and align with emission reduction of CO2em.