Analysing the role of globalisation, institutional qualities, and renewable energy consumption in environmental degradation mitigation: the SAARC experience

The main purpose of this work is to investigate the impacts of four different dimensions of globalisation (financial, trade, social, and political), institutional qualities, and renewable energy consumption on ecological footprints and carbon dioxide (CO2) emissions in the Environmental Kuznets Curve (EKC) framework. For quantitative analysis, this study includes yearly data from 1995 to 2020 for five South Asian Association for Regional Cooperation (SAARC) nations: Bangladesh, India, Nepal, Pakistan, and Sri Lanka. SAARC countries are the most vulnerable to climate change and fast economic transitions. The study employs the second-generation panel unit root test, the Westerlund cointegration technique, and the Driscoll-Kraay (DK) Standard Errors regression technique. The study shows that social globalisation, institutional quality, renewable energy consumption, and industrialisation benefit the environment by lowering the ecological footprint and CO2 emissions. Trade and political globalisation are harmful to the environment as both indicators have a significant positive impact on ecological footprint and CO2 emissions. Financial globalisation has a significant negative impact on only CO2 emissions and is not significant in the case of ecological footprint. Further, the empirical estimates validate the inverted U-shaped EKC hypothesis concerning ecological footprints and CO2 emissions. Furthermore, the robustness of long-term outcomes has been examined using the FMOLS and DOLS techniques. The present work suggests that SAARC countries can achieve a cleaner environment by adopting renewable energy, implementing strong institutional qualities, and promoting efficient technologies through globalisation.