The role of high human capital and green economies in environmental sustainability in the Asia-Pacific region, 1990–2022

Abstract

PurposeConsidering the inherent relationship between environmental degradation and the process of economic development, the latter is particularly reliant on the accumulation of human capital, which also emerges as one of the fundamental principles underlying green growth. However, this relationship tends to overlook varying levels of human capital. Hence, the purpose of this study is to examine the enduring associations between the stock of high human capital and green economies in terms of environmental sustainability among the key countries in the Asia Pacific region, namely Australia, Japan, Singapore, and South Korea, spanning the period from 1990 to 2022.Design/methodology/approachThis paper employs second-generation techniques. The long-term relationships were estimated using two constantly updated models - fully modified and bias corrected, CUP-FM and CUP-BC, respectively, to guarantee the robustness of our conclusions for the presence of cross-sectional dependency.FindingsThere is a long-term relationship between the stock of high human capital and the sustainability of the environment, in the same way that we have also found the same relationship between the development of socioeconomic practices of green economies. Finally, we conclude that, in the same way as the environmental Kuznets curve, the countries in our sample incur less environmental pollution as their level of income increases. This relationship may be motivated by a process of technological substitution and investment in the development of new techniques and technology to improve the efficiency of productivity with respect to the environment.Practical implicationsWe suggest that investing in education and promoting green economies can be powerful tools in the fight against climate change and promoting environmental sustainability. By prioritizing investments in renewable energy and sustainable technologies, policymakers can promote long-term economic and environmental health. Moreover, the findings suggest that promoting education in countries with high levels of environmental pollution can develop the knowledge and skills needed to implement sustainable practices and technologies. Ultimately, these efforts can contribute to improving income, productivity, and society's living conditions while reducing the environmental impact.Originality/valueThis research studies for the first time the load capacity curve hypothesis in determining the effects of the stock of high human capital and green economies on the environment. Consequently, limited papers have used the load capacity factor in the study of the relationships that we propose, especially that of human capital, which has scarcely been studied in relation to its contribution to the environmental fight.