Linking urbanization, human capital, and the ecological footprint in G7 countries: An empirical analysis

• Published in: Sustainable cities and society 2020-04, Vol.55, p.102064, Article 102064
• Main Authors: Ahmed, Zahoor, Zafar, Muhammad Wasif, Ali, Sajid, Danish
• Format: Article
• Language: English
• Subjects: CUP-FM & CUP-BC; Ecological footprint; G7 Countries; Human Capital; Urbanization
• ISSN: 2210-6707; 2210-6715
• DOI: 10.1016/j.scs.2020.102064

•This paper investigates the impact of urbanization and human capital on the ecological footprint of consumption.•CUP-FM and CUP-BC estimators are employed for G7 countries.•Urbanization increases the ecological footprint.•Human capital improves environmental quality.•Urbanization and human capital Granger cause the ecological footprint. The G7 countries are facing the challenges of high urbanization, growing ecological footprint, and decreasing biocapacity. In these countries, urban areas are the center of economic activities and resource consumption. On this note, current study examines the effect of urbanization and human capital on the ecological footprint in G7 countries. The study uses advanced panel data estimators, such as CUP-FM and CUP-BC on data from 1971 to 2014. The findings reveal that urbanization increases the ecological footprint, whereas human capital reduces it. The reliability of long-run estimates is also examined by using CO2 emissions as a proxy of environmental impact. The results of causality test disclose unidirectional causality from human capital and urbanization to the ecological footprint. However, the causality between urbanization, human capital, and economic growth is bidirectional. Moreover, energy consumption, economic growth, and import increase environmental degradation, while export and foreign direct investment reduce environmental degradation. Finally, detailed policy options are proposed to combat environmental challenges of G7 countries.