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<p>This study investigates the impact of renewable energy consumption (REC) and economic structure on environmental degradation, measured by the ecological footprint (ECF), across 35 Organization of Islamic Cooperation (OIC) countries over five non-overlapping periods from 2000 to 2024. By employing the dynamic panel two-step system GMM estimation framework with a lagged dependent variable to address endogeneity, the study aims to analyze the dynamic relationships between ecological footprint, renewable energy consumption, GDP, the square of GDP, per capita industrial, agricultural, and services value-added, the square of per capita industrial, agricultural, and services value-added, financial development, trade openness, and green investment in the OIC region. The results demonstrate various key findings: (1) the results confirm the highly persistent nature of ecological footprint, with lagged ECF coefficients ranging from 0.722 to 0.896 across all specifications. (2) Renewable energy consumption demonstrates a consistently negative and significant relationship with ecological footprint, confirming that greater clean energy adoption reduces environmental pressure. (3) The analysis finds no evidence for the Environmental Kuznets Curve (EKC) hypothesis. Instead of an inverted U-shaped relationship, the results indicate a U-shaped curve is observed for GDP at the aggregate level and is further validated through a sectoral lens, with services value-added also demonstrating significant U-curve relationships with the ecological footprint. (4) Trade openness (TO) is also a persistent positive driver, supporting the 'pollution haven' hypothesis. (5) Finally, the green investment policy (GI) exhibits a consistently negative and highly significant coefficient across all four models, proving to be the most robust factor in reducing the ecological footprint. The study recommends that OIC countries move beyond isolated measures like promoting renewables or efficiency. Instead, it calls for a comprehensive policy package featuring (1) strict green investment mandates and renewable energy targets, (2) financial sector reforms that integrate sustainability criteria, including mandatory environmental risk disclosure requirements for financial institutions, developing green bond markets, and ensuring that development finance institutions prioritize projects with positive environmental outcomes; (3) consumption-based environmental accounting to fully capture the global environmental cost of domestic economic activities and trade; and (4) deliberate greening of service sectors through green building codes and sustainable transportation policies to genuinely decouple growth from degradation.</p>

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The impact of renewable energy consumption on environmental degradation in organization of islamic cooperation countries

  • 期刊论文

  • 出版模式：

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  • 发表日期：

    2026年6月28日

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  • Maram Issam Khateeb,
  • Fathin Faizah Said,
  • Norlida Hanim Mohd Salleh,
  • Zulkefly Abdul Karim,
  • Samer Nayef AlKhatib

摘要

This study investigates the impact of renewable energy consumption (REC) and economic structure on environmental degradation, measured by the ecological footprint (ECF), across 35 Organization of Islamic Cooperation (OIC) countries over five non-overlapping periods from 2000 to 2024. By employing the dynamic panel two-step system GMM estimation framework with a lagged dependent variable to address endogeneity, the study aims to analyze the dynamic relationships between ecological footprint, renewable energy consumption, GDP, the square of GDP, per capita industrial, agricultural, and services value-added, the square of per capita industrial, agricultural, and services value-added, financial development, trade openness, and green investment in the OIC region. The results demonstrate various key findings: (1) the results confirm the highly persistent nature of ecological footprint, with lagged ECF coefficients ranging from 0.722 to 0.896 across all specifications. (2) Renewable energy consumption demonstrates a consistently negative and significant relationship with ecological footprint, confirming that greater clean energy adoption reduces environmental pressure. (3) The analysis finds no evidence for the Environmental Kuznets Curve (EKC) hypothesis. Instead of an inverted U-shaped relationship, the results indicate a U-shaped curve is observed for GDP at the aggregate level and is further validated through a sectoral lens, with services value-added also demonstrating significant U-curve relationships with the ecological footprint. (4) Trade openness (TO) is also a persistent positive driver, supporting the 'pollution haven' hypothesis. (5) Finally, the green investment policy (GI) exhibits a consistently negative and highly significant coefficient across all four models, proving to be the most robust factor in reducing the ecological footprint. The study recommends that OIC countries move beyond isolated measures like promoting renewables or efficiency. Instead, it calls for a comprehensive policy package featuring (1) strict green investment mandates and renewable energy targets, (2) financial sector reforms that integrate sustainability criteria, including mandatory environmental risk disclosure requirements for financial institutions, developing green bond markets, and ensuring that development finance institutions prioritize projects with positive environmental outcomes; (3) consumption-based environmental accounting to fully capture the global environmental cost of domestic economic activities and trade; and (4) deliberate greening of service sectors through green building codes and sustainable transportation policies to genuinely decouple growth from degradation.