Room for Improving the Ecological Sustainability Gap in G20 Economies through the Lens of Load Capacity Factor: The Role of Green Energy Initiatives as Moderators
Keywords:
Load capacity factor, Environmental kuznets curve hypothesis, Economic growth, Two-step sys-GMM approachAbstract
With the global imperative to combat climate and environmental challenges, the factors contributing to ecological contamination have received increasing attention in contemporary academic discourse. Meanwhile, the significance of the Green Energy Initiative (GEI) as a moderating factor in this interrelation is often overlooked in the world's leading economies, particularly within the G20-the largest contributor to global carbon emissions-in the context of the Load Capacity Factor (LCF). In this context, this study selected data from 2007 to 2022. It employed the two-step system GMM estimator for the equation to thoroughly shed light on the interrelation between ecological contamination, economic growth, Financial Development (FD), Trade Openness (TRO), and energy consumption. The findings disclose that GDP and its square positively and negatively impact LCF, respectively, confirming the Environmental Kuznets Curve (EKC) hypothesis. Moreover, TRO contributes to increased environmental degradation. Additionally, FD plays a positive role in reducing environmental degradation. Furthermore, the results reveal that GEI has significantly improved the G20's environmental sustainability. More importantly, the moderation effect of GEI and economic growth suggests that GEI can improve the effectiveness of economic growth to shape ecological sustainability. In light of the results obtained, various regulatory actions are proposed to curb ecological contamination, aligning with sustainable development principles.
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