Unemployment Rate, Clean Energy And Ecological Footprint In OECD Countries

Abstract OECD countries have encountered the challenges of improving the environmental sustainability while maintaining economic growth by not impairing employment. Designing green policies with the consideration of clean energy is claimed to resolve the mentioned challenges. This study attempts to reexamine the environmental Kuznets curve (EKC) hypothesis by using ecological footprint as an indicator of environmental degradation. Besides, our study aims to test the validity of environmental Phillips curve and role of clean energy on ecological footprint. Our data cover a panel of 36 OECD countries from 1995-2015. We adopt the second generation panel unit root and cointegration test to account for the presence of cross section dependence (CSD). Moreover, the long-run relationship is estimated using Common Correlated Effect Mean Group (CCEMG) and Augmented Mean Group (AMG) that are robust to CSD. Our results are able to provide valuable insights for environmental policy recommendations in OECD countries.