Spatial Effects of Renewable and Fossil Energy Consumption on the Ecological Footprint for the EU Countries

Abstract This study examines the spillover of pollution among the 26 European Union (EU) countries from 1995 to 2020. In order to quantify pollution spillovers among the countries we estimated Environmental Kuznets Curve (EKC) using spatial econometric methods. Our research is unique in that it investigates ecological footprint spillovers for the EU Countries. This study also considers the direct and indirect effects of renewable and fossil energy consumption and globalization on environmental degradation in EU countries. The empirical results favor the validity of the EKC hypothesis. Our results support the presence of positive and significant ecological footprint spillovers among EU countries. Our spatial estimates also reveal the significant spillover impact of explanatory variables on the ecological footprint. The ecological footprint of the local country is declining owing to the consumption of renewable energy in neighboring countries. Furthermore, the fossil energy consumption of the local and neighboring countries has a positive impact on the ecological footprint. Evidence obtained from our spatial estimates provides useful insights to policymakers in developing appropriate environmental policies to combat climate change.