Going green: understanding the impacts of economic complexity, clean energy and natural resources on ecological footprint in complex economies

To counter environmental degradation, policymakers across the world are trying to design a policy framework that focuses on expanding economic sophistication and complexity of production alongside fostering the use of renewable energy and mitigating natural resource depletion. This study aims to investigate how different factors affect the ecological footprint in 50 major complex economies. The study undertakes an extended STIRPAT equation with data from 1990 to 2018. The STIRPAT equation allows us to test the environmental Kuznets curve (EKC) hypothesis and explore the impact of renewable energy use, technology, population, and natural resources. The study utilizes several second-generation econometric techniques such as augmented mean group, mean group, and common correlated effect mean group estimation techniques and a second-generation panel causality test. The outcome of the study reveals the existence of the EKC in these complex economies. Economic complexity, clean energy consumption, and population density have a significant negative impact on ecological footprint, whereas natural resources reveal insignificant impacts. The research concludes with policy suggestions for achieving sustainable development in these major complex countries.