Challenges of Natural Resources on US Ecological Health: Insights from Economic and Energy Impacts

What is it about?

The paper examines the relationship between economic growth, renewable energy, biocapacity, and natural resources on the ecological footprint, framed by the Environmental Kuznets Curve hypothesis from 1980-2017. It highlights the asymmetric impact of natural resources on environmental pollution, revealing that economic growth and biocapacity exacerbate environmental degradation, whereas renewable energy consumption mitigates it. Positive shocks in natural resources help reduce environmental damage, while negative shocks worsen environmental quality. The study uses an asymmetric ARDL approach with structural breaks, providing new insights into policy-making for economy-centered environmental issues. The introduction underscores the urgency of addressing climate change, with the USA's significant role as a major emitter despite investments in renewable energy, and emphasizes the need to balance economic growth with environmental quality.

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Photo by Andreas Gücklhorn on Unsplash

Photo by Andreas Gücklhorn on Unsplash

Why is it important?

This research is significant because it provides a comprehensive analysis of the asymmetric impact of natural resources on environmental pollution within the framework of economic growth. By focusing on the USA and employing the Environmental Kuznets Curve hypothesis, this study highlights the intricate balance between economic development and environmental quality. It emphasizes the role of renewable energy and natural resources in mitigating environmental degradation, offering key insights for policymakers to formulate economy-centered environmental strategies that can sustain economic growth while protecting the environment. The study's findings are crucial for understanding the complex dynamics between economic activities, resource utilization, and ecological sustainability. Key Takeaways: 1. Economic Growth and Environmental Degradation: The study confirms that economic growth and biocapacity contribute to increased environmental degradation, underscoring the need for strategies that balance economic development with environmental sustainability. 2. Renewable Energy's Positive Role: Renewable energy consumption is shown to help reduce environmental damage, highlighting the importance of investing in and transitioning to renewable energy sources as a means of achieving environmental goals. 3. Asymmetric Impact of Natural Resources: The research reveals that positive shocks in natural resources can reduce environmental damage, while negative shocks worsen environmental quality, emphasizing the need for careful management and policy frameworks that address these asymmetric effects.