The Linkage among Energy Transition, Urbanization, and Ecological Footprint of Selected Asian Economies

Abstract

The purpose of this study is to conduct an empirical investigation the relationship between the ecological footprint (EF) index and factors such as the energy transition, the rate of agricultural growth, urbanization, globalization, and investment in most populous countries of Asia. Globalization is measured using the KOFGI index, and a positive coefficient indicates that globalization adds to the EF index. The growth rate of gross capital formation (GCF) demonstrates a marginally negative influence on the EF index, which is statistically significant at the 10% level. The two primary variables—energy transition and agriculture—make a positive contribution to the EF index; nevertheless, the fact that their coefficients are negative suggests that more use of renewable energy sources and faster agricultural development decrease the amount of strain placed on natural resources. Following the verification that there is no cross-sectional dependency through the use of first-order unit root tests, the PMG ARDL model is utilized in the research project in order to evaluate both short-term and long-term impacts. The Levin Lin and Chu, Harris-Tzavalis, Im Pesaran Shin, Phillips–Perron, and Hadri Lagrange multiplier stationarity tests are the five first-generation unit root tests that are utilized. As a result of the mixed order of integration and the greater amount of time-series observations in comparison to cross-sections, the PMG ARDL is utilized. In conclusion, the causality test developed by Dumitrescu and Hurlin demonstrates that there is a unidirectional causal relationship between energy transition and the EF index, as well as between the EF index and urbanization and GCF, and between energy transition and agriculture and urbanization.