How Do Natural Resource Rents Affect the Ecological Footprint? A Study for 24 Nations

Abstract

The main objective of this study was to analyse the disaggregated effect of natural resource rents on the ecological footprint in 24 countries. The impact of rents from oil, natural gas and minerals was examined. Using the CS-ARDL approach, it was found that these natural resources increase the ecological footprint, albeit by different amounts. For example, oil rents have a greater impact on the environment than natural gas and mineral rents. The latter generate less environmental pollution. In addition, using the approach of Dumitrescu and Hurlin (2012), a bidirectional relationship was found between oil rents and the ecological footprint. A similar result was obtained between mineral rents and this indicator of environmental degradation. This implies that, if countries decide to reduce their ecological footprint, the rents they derive from these resources will be affected. Therefore, it is essential that nations promote environmentally friendly natural resource extraction practices, using advanced technologies aligned with sustainable development principles. In the case of natural gas rents, these were found to cause an impact on the ecological footprint without feedback effects. This means that countries can be sure that decreasing their ecological footprint will not have an economic impact in relation to the rents they earn from natural gas. Therefore, countries are encouraged to continue to promote the sustainable extraction of this resource.