Colligating ecological footprint and economic globalization after COP21: Insights from agricultural value-added and natural resources rents in the E7 economies

Abstract

ABSTRACT While economic globalization and resource utilization continue to foster growth among nations, the Paris Convention adopted at COP21 has highlighted some imminent environmental dangers facing humanity if pertinent collective climate actions are ignored. Thus, this study assesses the links between ecological footprint and economic globalization among the E7 nations in the aftermath of COP21. This study fills the gap in the literature on the E7 bloc by accounting for the unexplored role of agricultural value-added while accounting for the impacts of resources rent, disaggregated energy use, and economic growth towards addressing environmental-related Sustainable Development Goals (SDGs) in the bloc. A combination of estimation techniques, including the Dynamic Ordinary Least Squares (DOLS), Fully Modified Ordinary Least Squares (FMOLS), and Panel-ARDL, was employed to address methodological flaws while analyzing data ranging from 1990 to 2019. The results show that globalization and agricultural activities have exacerbated ecological footprint to the detriment of the E7’s environmental quality. The results further indicate that the expansion of economic activities in the E7 countries has also increased the conventional energy consumption (oil, coal, and gas for electricity generation), thereby translating to environmental deterioration via a higher ecological footprint. Overall, to ensure a sustainable environment in our increasingly globalized world, the study posits that policymakers in the E7 should facilitate proper implementation of environmental damage cost in addition to maintaining strategic resource control measures in order to increase the awareness of the explorers of natural resources and other international organizations of their economic activities beyond business as usual.