Sustainability assessment using STIRPAT approach to environmental quality: an extended panel data analysis

Area of Science:

• Environmental Economics
• Sustainable Development
• Econometrics

Background:

• Increasing economic activities correlate with environmental deterioration.
• The Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) model and Environmental Kuznets Curve (EKC) are key analytical frameworks.
• Understanding the relationship between economic structure and environmental quality is crucial for policymakers.

Purpose of the Study:

• To investigate the existence and shape of the EKC within the STIRPAT framework for 80 countries.
• To analyze the impact of industrial, agricultural, and service-based economic activities on environmental quality.
• To identify factors influencing carbon dioxide emissions and environmental sustainability.

Main Methods:

• Utilized the STIRPAT model and EKC analysis.
• Employed dynamic ordinary least squares (DOLS) to estimate results and control for autocorrelation.
• Analyzed data for 80 selected countries from 1990 to 2017.

Main Results:

• Confirmed a U-shaped EKC, suggesting environmental quality initially deteriorates with economic growth but improves after a certain threshold.
• Found that over-reliance on specific economic sectors (industrial, agricultural, services) negatively impacts the environment.
• Identified urbanization as a driver of carbon dioxide emissions, while governance and technology act as mitigating factors.

Conclusions:

• A balanced economic activity composition is essential for minimizing environmental deterioration.
• Policy interventions should focus on promoting sustainable economic structures and leveraging governance and technology for environmental protection.
• The study provides insights for classifying countries based on the sustainability of their economic sectors.