Can environmental sustainability be decoupled from economic growth? Empirical evidence from Eastern Europe using the common correlated effect mean group test

The European Union(EU) and Organisation for Economic Co-operation and Development(OECD) aim to develop long-term policies for their respective member countries. Having observed increasing dangers to the environment posed by rising economic growth, they are seeking pathways to enable policy action on economic growth and environmental sustainability. Given the facts in theoretical and empirical studies, this study assessed the validity of the decoupling hypothesis by investigating asymmetricity in the relationship between environmental sustainability and economic growth in nine Eastern European countries from 1998 to 2017 using the cross-section augmented Dickey-Fuller(CADF) unit root, panel corrected standard error(PCSE), common correlated effect mean group(CCEMG), and Dumitrescu Hurlin causality approaches. Both population growth and drinking water are used as controlled variables. The outcomes establish strong cointegration among all the variables of interest. According to the results of CCEMG test, economic growth exerts short-term environmental degradation but has long-term environmental benefits in Eastern Europe;and population growth and drinking water exert a positive effect on environmental sustainability in both the short-and long-run. The results of Dumitrescu Hurlin causality test indicate that environmental sustainability is unidirectionally affected by economic growth. Based on these outcomes, we suggest the following policies:(1) the EU and OECD should implement member-targeted policies on economic growth and fossil-fuel use towards regulating industrial pollution, water use, and population control;and(2) the EU and OECD member countries should invest in environmental technologies through green research and development(R&D) to transform their dirty industrial processes and ensure productive energy use.

Economic complexity and environmental sustainability in eastern European economies:Evidence from novel Fourier approach

Globally,economies have become complex and new technologies have transformed and facilitated the modernization of economies.In the previous literature,economic complexity approach has become one of the popular tools in the development and innovation studies of economic geography.Researchers have found that green technology and eco-innovation approaches should be used to decisively reduce the effects of carbon emissions on the environment.However,debates about the impact of economic complexity on environment remain unsettled since some emerging production technologies have far-reaching pollution effects.This study explored the impacts of economic complexity on environmental sustainability in Turkey using the novel Fourier-based approaches,namely:Fourier Augmented Dickey-Fuller(FADF)and Fourier Autoregressive-Distributed Lag(FARDL)models.The Fourier-based approaches indicated that all variables(economic complexity index(ECI),GDP,energy consumption,and CO_(2)emission(CO_(2)E))are cointegrated in the long run.Additionally,the FARDL model implied that(i)in the long run,the effect of ECI(as a proxy for economic complexity),GDP(as a proxy for economic growth),and energy consumption on CO_(2)E(as a proxy for environmental quality)are important;(ii)economic complexity decreases environmental degradation in Turkey;and(iii)economic growth and energy consumption negatively affect environmental quality.The results also showed that economic complexity could be used as a policy tool to tackle environmental degradation.The findings also revealed that the fossil fuelbased economy will continue to expand and undermine Turkey’s efforts to meet its net zero emission target by 2053.Therefore,policy-makers should take actions and establish diversified economic,environmental,and energy strategies.For policy insights,the Turkish governments can use the combination of tax exemptions and technical support systems to support knowledge creation and the diffusion of environmentally friendly technologies The governments can also impose strict environmental regulations on the knowledge development phases.