Energy consumption, economic growth and Ecological footprint relationship in the top Russian energy importers: a panel data analysis

Abstract

This study examines the relationship between renewable and non-renewable energy consumption, economic growth, and ecological footprint for the top 14 Russian-energy-importing countries in 2000-2018. Through PVAR analysis, this study calculates the long-term correlation between variables using a VEC model. The VAR approach addresses the endogeneity issue by including endogenous interactions between the variables in the model. Additionally, the impulse response functions and the influence of various variables on certain lags are evaluated. Cointegration between variables was assessed using DOLS and FMOLS panel analysis to investigate the long-term link further. Our findings demonstrate that there is a cointegration relationship between all series. According to the impulse response analysis results, an energy shock from Russia will negatively affect the countries' economic growth and decrease the ecological footprint. Increasing renewable and non-renewable energy consumption domestically increases ecological footprint, but the effect of renewable energy consumption on ecological footprint seems to be less. According to DOLS findings, a 10 percent increase in Russian fuel exports increases the elasticity of economic growth by 0.61%. In contrast, FMOLS findings indicate that a 10% increase in Russian fuel export increases the elasticity of economic growth by 1%. However, the direction of the relationship is positive when the ecological footprint is considered the dependent variable: While the non-renewable energy consumption elasticity coefficient was 0.030 in the DOLS model, it was found to be 0.023 in the FMOLS model. The elasticity value of the economic growth variable was found to be 0.69 in the FMOLS model.