Does Environmental Degradation Pose a Threat To Human Development? Evidence from Moment Quantile Regression with a Fixed Effect

This study examines the extent to which environmental degradation (END) threatens human development (HD) in 40 developing countries from 1998 to 2021. The study uses the method of moment quantile regression with a fixed effect to evaluate the heterogeneous impact of END on the conditional distribution of HD. We also use fully modified OLS and dynamic OLS estimators for robustness. The findings indicate that environmental deterioration is associated with lower HD in developing nations in our sample, with the lowest HD in countries at the lower level of HD. The study also found evidence that institutional quality moderated the detrimental impact of ecological degradation on HD in developing nations. Furthermore, we established evidence of bidirectional causality between END and HD. Moreover, financial development, institutional quality, government spending, and remittances positively impact HD. Thus, we provide policy implications that will promote the adoption of clean technology and increase renewable energy consumption to achieve sustainable human development.