Do Economic Policy Uncertainty and Geopolitical Risk Lead to Environmental Degradation? Evidence from Emerging Economies

Muhammad Khalid Anser, Qasim Raza Syed, Hooi Hooi Lean (), Andrew Alola and Munir Ahmad
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Muhammad Khalid Anser: School of Public Administration, Xi’an University of Architecture and Technology, Xi’an 710055, China
Qasim Raza Syed: National Tariff Commission, Ministry of Commerce, Islamabad 44000, Pakistan
Munir Ahmad: School of Economics, Zhejiang University, Hangzhou 310000, China

Sustainability, 2021, vol. 13, issue 11, 1-15

Abstract: Since the turn of twenty first century, economic policy uncertainty (EPU) and geopolitical risk (GPR) have escalated across the globe. These two factors have both economic and environmental impacts. However, there exists dearth of literature that expounds the impact of EPU and GPR on environmental degradation. This study, therefore, probes the impact of EPU and GPR on ecological footprint (proxy for environmental degradation) in selected emerging economies. Cross-sectional dependence test, slope heterogeneity test, Westerlund co-integration test, fully modified least ordinary least square estimator, dynamic OLS estimator, and augmented mean group estimator are employed to conduct the robust analyses. The findings reveal that EPU and non-renewable energy consumption escalate ecological footprint, whereas GPR and renewable energy plunge ecological footprint. In addition, findings from the causality test reveal both uni-directional and bi-directional causality between a few variables. Based on the findings, we deduce several policy implications to accomplish the sustainable development goals in emerging economies.

Keywords: ecological footprint; economic policy uncertainty; geopolitical risk; renewable energy consumption; non-renewable energy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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