Renewable energy transition, resource richness, economic growth, and environmental quality: Assessing the role of financial globalization

This study investigates the impact of renewable energy transition, abundance of natural resources, financial globalization, and economic growth on the ecological footprint (EF) in G-11 countries under the Environmental Kuznets Curve (EKC) framework. In addition, this study further analyzes the moderating role of financial globalization in the nexus between renewable energy transition and EF. To do this, the study used the cross-sectional autoregressive distributed lags (CS-ARDL) for the short-run and long-run estimations, which allow heterogeneity in the slope parameters and dependency across countries. The results indicate that renewable transition and financial globalization are significantly and negatively related to ecological footprint, while natural resource rent positively impacts EF. Moreover, the findings further reveal that financial globalization impedes EF through the channel of renewable energy transition, and the robustness test also validates these findings. Our results confirm the presence of the EKC hypothesis for G-11 countries. In light of these findings, the study suggests that G-11 countries should adopt policies that enhance financial globalization along with renewable energy transition and redesign policies for sustainable utilization of natural resources in order to attain sustainable development goals.