The role of biomass energy consumption and economic complexity on environmental sustainability in G7 economies


Shahzad U., Elheddad M., Swart J., Ghosh S., Dogan B.

BUSINESS STRATEGY AND THE ENVIRONMENT, 2022 (Peer-Reviewed Journal) identifier identifier

  • Publication Type: Article / Article
  • Publication Date: 2022
  • Doi Number: 10.1002/bse.3175
  • Journal Name: BUSINESS STRATEGY AND THE ENVIRONMENT
  • Journal Indexes: Social Sciences Citation Index, Scopus, International Bibliography of Social Sciences, ABI/INFORM, Aerospace Database, Business Source Elite, Business Source Premier, Communication Abstracts, Environment Index, Geobase, Greenfile, INSPEC, Metadex, Pollution Abstracts, Psycinfo, Public Affairs Index, Civil Engineering Abstracts
  • Keywords: biomass energy, carbon footprint, clean energy, ecological footprint, economic complexity, G7 economies, ECOLOGICAL FOOTPRINT, KUZNETS CURVE, PANEL-DATA, COINTEGRATION TESTS, ERROR-CORRECTION, GROWTH, COUNTRIES, HYPOTHESIS, REGRESSION, INCOME

Abstract

This paper empirically examines the effect of biomass energy consumption and economic complexity on environmental sustainability in G7 economies. The current study attempts to report a comprehensive analysis of biomass energy and economic complexity on ecological and carbon footprints and carbon emissions. We employ data from 1990 to 2019 and adopt robust panel econometric techniques that account for the analysis's cross-sectional dependence. We conduct cointegration analysis, pooled ordinary least squares (OLS), system generalized method of moments (GMM) and conditional quantile model for our empirical analysis. The empirical findings show that both biomass energy consumption and economic complexity are detrimental to the ecological footprint and carbon footprint. Additionally, we find that globalization positively affects the environment, while we find some evidence that bureaucratic quality improves environmental quality. Finally, in line with other research, we find that economic growth has detrimental effects on the environment. Our results suggest that policymakers should be more cautious in promoting biomass as a clean energy source and that the G7 economies should take advantage of their leading position in innovation to invest more in sustainable practices and investment.