ECOLOGICAL FOOTPRINT, ECONOMIC GROWTH AND ECOLOGICAL EFFICIENCY

Abstract

The ecological footprint is one of the important environmental impact indicator of humanity’s demand for crop, forest, fishing grounds, grazing and built-up land as well as for the area of land required to assimilate CO2 emissions and waste generated by human activities. This indicator describes resource budget and environmental degradation of globe, a region, a nation or a city in a given year. This study examined trends of ecological footprint, economic growth and ecological efficiency of middle and high income countries. It also estimated the gap between a country’s efficiency in resource utilization and maximum ecological efficiency of total footprints and its components. Besides, inequality in the distribution of income, environmental impact intensity (or ecological efficiency) and ecological footprint for the group of middle and high income countries is also estimated. The study used the panel dataset for the period 2003- 2011 that covered 35 High and 77 Middle income countries. The data on the Ecological footprint was obtained from Global Footprint Network. The Stochastic Impact by Regression on Population, Affluence and Technology (STIRPAT) model was used as an analytical tool to examine the effect of various driving forces on total ecological footprint, cropland, forest, fishing grounds, grazing land, CO2 footprint and built-up land footprint. The Atkinson Index was used as an analytical tool to examine inequality between High and Middle income countries in distribution of income, footprints and environmental impact intensity. The findings revealed that the high income countries used more ecological resources than their biocapacity as compared to middle income countries. The ecological footprint, GDP per capita, ecological efficiency, fossil fuel consumption, and level of urbanization and service intensity of high income countries are larger than middle income countries. While population density, annual working hours, and manufacturing and services intensity of high income countries are lower than middle income countries. Similarly, the sampled countries have more potential in cropland, forest and grazing land activities, followed by CO2 footprint, fishing grounds and built-up land footprint for achieving maximum level of ecological efficiency. The regression analysis of combined panel supports the environmental Kuznets Hypothesis in case of total ecological footprint and its components. The separate panel model regression analysis of high income countries supports the hypothesis in case of total ecological footprint, fishery, and grazing and built-up land footprint. The results of middle income countries of total ecological footprint, cropland, CO2 footprint and grazing land footprint support the hypothesis that decoupling of economic growth accelerates environmental sustainability. The major driving forces that contribute to increase in total ecological footprint are economic growth, population, xiii level of urbanization, fossil fuel consumption, export intensity and income inequality. Similarly, a rise in economic growth, population, export and manufacturing intensity, working hours, coal, oil and gas consumption increases CO2 footprint of the sample countries. However, further level of economic development and education improve environmental quality by reducing cropland, fishing grounds and forest footprint. The comparison of resource distribution through Atkinson Index shows that high income countries have larger equality in footprint and environmental impact intensity than middle income countries in case of grazing land, forest, fishing grounds and built-up land. It is suggested that both high and middle income countries should control ecological overshooting. Investment in education is instrumental in reducing the ecological footprint. Rural areas should be developed through creating job opportunities, agro-based business activities and small scale industries which will reduce pressure on built-up land footprint. Production and use of renewable energy alternatives such as wind, solar system and micro hydro power plants can lessen the CO2 footprint and also leads toward environmental sustainability. The high and middle income countries should prioritize the utilization efficiency of cropland, forest and grazing land. The high income countries should reduce their footprint associated with forest, CO2, fishing grounds and built-up land, because its average environmental impact intensity is greater than their biocapacity. The middle income countries should reduce cropland and grazing land footprint due to their larger mean environmental impact intensity than high income countries.