Unraveling the Interrelationship of Digitalization, Renewable Energy, and Ecological Footprints within the EKC Framework: Empirical Insights from the United States

Abstract

The study seeks to better comprehend the ecological footprint of the United States by analyzing the effects of digital financial inclusion (FinTech) as well as renewable and non-renewable energy usage. Data from 2005 Q1 to 2020 Q4 were analyzed using the quantile autoregressive lag (QARDL) method. It also used Granger causality in quantiles to analyze the correlation between variables and draw conclusions about their relative importance. Quantile-wise, the error correction parameter is statistically significant with the predicted negative sign, as shown by the results obtained using the QARDL method. Indications are mounting that the relationship between these variables and the United States’ ecological footprint is returning to its long-term equilibrium. However, in the long/short-run period, across all quantiles, economic growth and consumption of non-renewable energy have a positive impact on the ecological footprint. The environmental Kuznets curve (EKC) theory was also examined, which holds that an inverted U-shaped link exists between economic growth and environmental degradation. The QARDL study’s findings corroborated the presence of an EKC in the US, lending credence to the theory that while economic growth at first promotes environmental deterioration, further progress ultimately promotes environmental improvement. The study additionally checked the results of the QARDL test for robustness using the ARDL approach. Recommendations for public policy are included in the paper for consideration by legislators and policymakers.

Digitalization Level and Green-Oriented Transition Development of Highly Energy-Intensive Enterprises Based on Carbon Reduction Perspective

“…It turns out that the digital effect on a firm's carbon emission is a non-linear "inverted U" type relationship. This conclusion is consistent with previous scholars [1,[46][47][48][49]. At the early stage of digital transformation, massive energy consumption is needed for infrastructure construction, and at the same time, the digitalization construction squeezes the investment in energy saving and carbon reduction, which leads to a situation in which carbon emissions cannot be reduced but increase with the growth of the digitalization level.…”

Assessing the Impact of Digitalization, Tax Revenues, and Energy Resource Capacity on Environmental Quality: Fresh Evidence from CS-ARDL in the EKC Framework

“…This hypothesis proposes an initial worsening of environmental quality, followed by an improvement as economies mature. The empirical alignment with the EKC hypothesis is further supported by studies by Jahanger et al [8], Saqib et al [101], Dahmani [104], and Youssef et al [105], all of which confirm similar trends in major manufacturing economies, the United States, and European Economic Area countries, respectively.…”

“…Building on the theoretical foundations of the EKC and informed by studies such as those of Dahmani et al [98,99], Hashmi et al [16], Islam and Rahaman [70], Pata et al [100], and Saqib et al [101], the current study constructs an analytical framework specifically tailored to its research objectives. This framework is articulated through a governing equation designed to capture the relationship between GHG emissions and a selection of economic and policy variables and is presented as follows:…”

Exploring the impact of geopolitics on the environmental Kuznets curve research

“…According to the Global Footprint Network, the United States has the second-largest overall ecological footprint and total biocapacity in the world (Network, 2023), and its ecological footprint per capita is twice that of China's (Saqib et al, 2023). The United States has the highest GDP in the world, but its rapid economic growth is also accompanied by two significant environmental problems: carbon (Zafar, Zaidi, et al, 2019).…”