Exploring the nexus between economic complexity, energy consumption and ecological footprint: new insights from the United Arab Emirates

• Published in: International journal of energy sector management Vol. 17; no. 6; pp. 1137 - 1160
• Main Authors: Arnaut, Marina, Dada, James Temitope
• Format: Journal Article
• Language: English
• Published: Bradford Emerald Publishing Limited 16-11-2023; Emerald Group Publishing Limited
• Subjects: Biosphere; Clean energy; Climate action; Climate change; Complexity; Ecological effects; Ecological footprint; Economic activity; Economic development; Economic growth; Economic models; Economics; Emissions; Energy consumption; Energy policy; Environmental quality; Footprint analysis; Fossil fuels; GDP; Globalization; Green products; Gross Domestic Product; Literature reviews; Manufacturing; Natural resources; Per capita; R&D; Renewable energy; Research & development; Solar energy; Sustainability; Sustainable development; Urbanization; United States > US; United Arab Emirates; C31; Q57; Renewable energy; Q5; Nonrenewable energy; UAE; Economic complexity; Ecological footprint; O44
• ISSN: 1750-6220; 1750-6220; 1750-6239
• DOI: 10.1108/IJESM-06-2022-0015

Purpose
Motivated by the 2030 UN Sustainable Development Goals (SDG-7: clean and affordable energy, SDG-8: sustainable economic growth, SDG-13: climate action), this study aims to investigate the role of economic complexity, disaggregated energy consumption in addition to economic growth, financial development, globalization and urbanization on the ecological footprint of United Arab Emirates (UAE).
Design/methodology/approach
This study adopts unit root tests (with and without a structural break), autoregressive distributed lag (ARDL) bounds test and dynamic ordinary least squares.
Findings
The results obtained from the ARDL model suggest that economic complexity (EC), nonrenewable energy and economic growth increase the ecological footprint in both the short and long run, thus deteriorating the environment. However, renewable energy and urbanization reduce the ecological footprint in UAE during the two periods, thus improving environmental quality. Globalization and financial development have different influences on ecological footprint during these periods. These findings are robust to other estimation techniques.
Practical implications
Based on these results, this study offers significant policy implications such as increasing renewable energy supply, particularly solar energy and aligning the product manufacturing structure and complexity toward producing environmentally friendly products which can be used to realize the nation’s agenda of reducing fossil fuels consumption to 38% by 2050 and achieving sustainable environment and growth.
Originality/value
This study provides an empirical attempt to investigate the influence of EC and renewable and nonrenewable energy on the ecological footprint of the UAE.