How do renewable energy consumption, financial development, and technical efficiency change cause ecological sustainability in European Union countries?

Abstract

Achieving ecological sustainability is a critical issue of the current era, and researchers are striving to find viable solutions for sustainable development and ecological wellbeing. This study is an effort to examine the ecological consequences of renewable energy (REC), financial development (FD), and technical efficiency (TE) in 27 countries of the European Union (EU), time ranges from 1980 to 2018. We used second-generation econometric techniques to consider the cross-sectional dependency in the model and the CS-ARDL method to estimate the long-run dynamics of the variables. The Westerlund cointegration technique confirmed the long-run association among REC, FD, TE, and ecological footprint (EF). Furthermore, CS-ARDL results revealed a positive influence of FD on EF, indicating FD is a significant contributor to the ecological footprint of the EU. However, REC and TE promote ecological sustainability in the EU, as both factors negatively affect the EF. Furthermore, the interaction of FD and TE is also estimated to mitigate EF in sample countries. The study recommends that government policies in EU countries must be skewed towards promoting renewable energy usage, lending in green and energy-efficient technology, and technological advancement in the production process.

Modelling the green logistics and financial innovation on carbon neutrality goal, a fresh insight for BRICS‐T

“…Following the determination of CSD and SLH, the CS‐ARDL is the best strategy for long‐term correlation. This technique estimates dynamic common correlation effects for time dynamics, CSD‐SLH and error cross‐country dependence and investigates short‐ and long‐run estimation (Zhen et al, 2022). The CS‐ARDL common elasticity coefficients contribute to a shared policy framework for environmental sustainability.…”

The prominence of fossil energy resources in ecological sustainability of BRICS: The key role of institutional worth

“…Ali et al (2021) reached similar conclusions for Vietnam, concluding that fossil fuel consumption is a major contributor to CO 2 emissions. By using the data of European union countries for the period 1980 to 2018, Zhen et al (2022) also concluded that conventional energy resources have adverse impact on environmental quality.…”

“…Possibly, the panel cointegration approach is essential that is generally appropriate for the shorter cross-sectional's time-series elements. Recent research (Jianguo et al, 2022;Zhen et al, 2022) has attempted to apply (Westerlund, 2007) the panel cointegration method, which is based on the assumption of CSD. The Westerlund test for panel cointegration accounts for CSD and SLH, which are the critical aspect in panel data estimation (Zhen et al, 2022).…”

“…Recent research (Jianguo et al, 2022;Zhen et al, 2022) has attempted to apply (Westerlund, 2007) the panel cointegration method, which is based on the assumption of CSD. The Westerlund test for panel cointegration accounts for CSD and SLH, which are the critical aspect in panel data estimation (Zhen et al, 2022). The approach consists of four statistical tests, including Gt, Ga, Pt, and Pa.…”

“…Finally, the cross-section's dependency is addressed by employing a recently developed CS-ARDL approach. Unlike other standard and pooled mean group techniques, the CS-ARDL is an effective and reliable method for estimating longterm effects (Zhen et al, 2022). In addition, the CS-ARDL method is effective against slope heterogeneity and crosssectional dependency problems but also for a number of other concerns, such as non-stationarity, endogeneity, and unknown variances, which omission may lead to misleading and erroneous outcomes (Wang et al, 2018).…”