Journal of Cleaner Production 272 (2020) 122709

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Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

The nexus between urbanization, renewable energy, trade, and

ecological footprint in ASEAN countries
Solomon Nathaniel a, b, *, Syed Abdul Rehman Khan c, d
a
University of Lagos, Akoka, Nigeria
b
Lagos State University, School of Foundation, Badagry, Nigeria
c
School of Management, Xuzhou University of Technology, Xuzhou, China
d
School of Economics and Management, Tsinghua University, Beijing, China

a r t i c l e i n f o a b s t r a c t

Article history: Economic growth, accompanied by rising energy demand in ASEAN countries have been unprecedented
Received 23 December 2019 over these few years. On the other hand, the energy consumed in the ASEAN region is predominantly
Received in revised form non-renewable, which could have implications for sustainable development. Previous studies that have
4 June 2020
investigated the energy-growth-environment nexus for this region are inefficient in terms of the proxies
Accepted 5 June 2020
Available online 11 July 2020
used to measure environmental quality and the estimation techniques adopted. As such this study ex-
plores the influence of renewable and non-renewable energy consumption, economic growth, and ur-
^ as de
Handling editor: Cecilia Maria Villas Bo banization on a more reliable environmental indicator (ecological footprint) from 1990 to 2016, while
Almeida controlling for trade. First-and-second-generation unit root and cointegration tests are applied amidst
evidence of cross-sectional dependence. Findings reveal that economic growth, trade, and non-
Keywords: renewable energy contribute significantly to environmental degradation in ASEAN countries. This sug-
Renewable energy gests that the region is growing at the expense of its environment, while also indulging in emission-
Urbanization intensive trade. Further findings show a one-way causality from urbanization to non-renewable en-
Trade
ergy consumption. Policy directions and implications of the findings for sustainability are discussed.
Ecological footprint
© 2020 Elsevier Ltd. All rights reserved.
AMG
ASEAN

1. Introduction energy consumption. This unprecedented increase in energy de-

The evidence of climate change is there for all to see. Denying
climate change does not make it less real. The negative impact of
climate change is expected to fall more on developing countries just
because they lack the capacity to efficiently cope with the problems
emanating from it (Nkengfack and Fotio, 2019). Many national and
regional economies have witnessed economic improvements and
transformation in the current century. These improvements are
accompanied by environmental pressure. For instance, in 1961,
humanity used more than fifty per cent of the earth’s biodiversity,
and forty-four per cent more than was available in 2006 (Global
Footprint Network, 2010). According to Lin et al. (2015), the
regeneration capacity of 1.6 Earths is currently needed for the
world to sustainably provide and cater for humanity.
Industrialization, and by extension globalization, increases
* Corresponding author.nUniversity of Lagos, Akoka, Nigeria.
E-mail addresses: nathaniel_solomon21@yahoo.com (S. Nathaniel), Sarehman_
cscp@yahoo.com (S.A.R. Khan).
mand is responsible for the trade-off between economic growth
and environmental quality, which is not easy to manage. The dif-
ficulties in managing this situation emanate from the use of fossil
fuels to satisfy human energy needs. As a result, the relationship
between environmental quality and economic growth has gained
the attention of recent studies in the energy-environment litera-
ture (see, Alola et al., 2019b; Baloch et al., 2019b; Nathaniel and
Iheonu, 2019; Destek and Sarkodie, 2019; Nathaniel and Bekun,
2019; Hassan et al., 2019a; Zafar et al., 2019a; Ali et al., 2020;
Nathaniel and Bekun, 2020). These studies, however, arrived at
different results and varying recommendations to suit each coun-
tries peculiarity.
About 68% of the world’s Green House Gases (GHGs) is gener-
ated from the energy sector, with fossil fuels and coal accounting
for 44% of the GHGs (IEA, 2017). The energy consumed in the As-
sociation of Southeast Asian Nations (ASEAN) is predominantly
non-renewable. Non-renewable energy sources are high in emis-
sions and are capable of degrading the environment. The regions
energy demand is expected to increase by 80% between 2013 and

https://doi.org/10.1016/j.jclepro.2020.122709
0959-6526/© 2020 Elsevier Ltd. All rights reserved.
2 S. Nathaniel, S.A.R. Khan / Journal of Cleaner Production 272 (2020) 122709
2035. About 70% of energy-related global CO2 emissions emanate
from urbanization (IEA, 2017). As of 2012, the ASEAN population
was about 600 million (ASEAN Briefing, 2014), and the countries in
the region are getting more rapidly urbanized (Wang et al., 2016).
For more than three decades now, the regions GDP growth rate
has averaged 5.5% (Ahmed et al., 2017). There are rising concerns
that economic growth, accompanied by an increase in energy de-
mand in ASEAN countries contributes to GHGs which causes
climate change (ASEAN Centre for Energy, 2015). Recent natural
disasters in ASEAN countries have been attributed to environ-
mental degradation emanating from excess fossil fuels consump-
tion (Rosenzweig et al., 2010). Until recently, climate change
problems were neglected in the region (except in Singapore), with
much concentration on the implementation of growth policies
(Helm et al., 2012). Inadequate investment in energy technology,
over-reliance on fossil fuels, and the inadequate consumption of
renewable energy (REN) made the ASEAN region the third largest
emitter in the world (Ahmed et al., 2017). The 21st century is fondly
referred to as the Asian Century because economic growth has been
shouldered by the emerging economies in Asia. With a GDP of 2.6
trillion USD, and a growth rate of 5.2% (FocusEconomics, 2018),
ASEAN is now an important economic bloc (Nasir et al., 2019). The
growth in this region is even expected to persist (Das and Lin, 2018).
While this progress and economic improvement are
commendable, its environmental impact may be far-reaching.
Therefore, it is ideal to consider the environmental and ecological
impact of this improvement. The literature on the growth-
environment nexus have yielded mixed results, and the majority
of the studies concentrated on the contrasting impact of the short
and long-run consequences of growth. A lot of studies have focused
on the energy-growth-environment nexus in ASEAN countries (see
Salman et al., 2019; Nasir et al., 2019; Chontanawat, 2018; Liu et al.,
2017; Ahmed et al., 2017; Suzuki and Nijkamp, 2017; Baek, 2016;
Wang et al., 2016; Heidari et al., 2015; Saboori and Sulaiman, 2013).
All these studies used CO2 emissions to measure environmental
quality. Unfortunately, CO2 emissions is a weak and inefficient
measure. Apart from CO2 emissions, there are other environmental
assessment tools like Emergy (the available solar energy used up
directly and indirectly to make a service or product), Exergy,
MuSIASEM (a method of accounting used to analyse socio-
ecosystems and to simulate possible patterns of development),
Life-cycle assessment (a methodology for assessing environmental
impacts associated with all the stages of the life-cycle of a com-
mercial product, process, or service), etc. In all, the ecological
footprint (EFP) is a far better option. The EFP captures the envi-
ronmental consequences of the production of goods, as well as,
services (Rashid et al., 2018). It encompasses six categories of bio
productive land use type (grazing land, forest land, cropland, ocean,
carbon footprint, and build-up land). Interestingly, the EFP is the
only metrics that compare the resource demand of businesses, in-
dividuals, and government against what Earth can renew
(Nathaniel, 2020).
Against this backdrop, this study enriches the existing literature
in the following ways: (i) unlike previous studies that used CO2
emissions, this is the first study to use EFP to capture environ-
mental quality in the energy-growth-environment nexus for
ASEAN countries. The EFP is an aggregate indicator (Wang and
Dong, 2019), and by far superior to CO2 emissions (Alola et al.,
2019a; Hassan et al., 2019a). EFP is widely accepted as an envi-
ronmental indicator in the social sciences. Also, the United Nations
Environment Programme (UNEP) and the World Wildlife Fund
(WWF) use EFP for their policy reports. (ii) In order to avoid biased
estimates which could result from ignoring cross-sectional
dependence (CD) among the countries, first and second-
generation unit root and co integration tests, and estimation
techniques that are robust for CD are applied. (iii) The Augmented
Mean Group (AMG) estimation technique which accounts for CD
and country-specific heterogeneity is used so as to avoid being
trapped in the guise of overgeneralization that marred previous
studies. The AMG gives not only panel results, but also for each
ASEAN countries.
The remainder of the study is structured as follows: Section 2
presents the literature review; Section 3 addresses the methodol-
ogy; Section 4 presents and discusses the results; Section 5 con-
cludes with germane policy directions.
2. Literature review
Of recent, studies that investigated the effect of economic
growth, energy consumption, and even urbanization on the envi-
ronment are ubiquitous. The findings from these studies have al-
ways yielded wide discrepancies due to variations in the data range,
methodologies adopted, proxies for variables, and country or
regional peculiarities. For instance, Nathaniel et al. (2020a) used the
AMG estimator to investigate the effects of REN, urbanization, and
trade on the EFP in Colombia, Indonesia, Vietnam, Egypt, Turkey,
and South Africa (CIVETS) from 1990 to 2014. They discovered that
trade and REN improve environmental quality, while NRE and ur-
banization contribute to environmental deterioration. Sharif et al.
(2020) applied the quantile ARDL technique to examine the
impact of NRE and REN on the EFP in Turkey from 1965Q1-2017Q4.
Their findings suggest that REN declines the EFP on each quantile.
Further findings revealed a feedback causality between REN, eco-
nomic growth, and NRE with EFP.
Danish et al. (2020) discovered that REN and urbanization
promote environmental quality in BRICS by reducing the EFP. The
authors arrived at this result by applying the FMOLS and DOLS
econometric techniques on data spanning 1992 to 2016. They
concluded that BRICS economies require a paradigm shift to clean
energy so as to attain the SDGs. This is the exact opposite of what
Ahmed et al. (2020b) discovered for G7 countries. The later re-
ported that urbanization degrades the environment by increasing
the EFP. Economic growth and NRE were the other culprits.
Nathaniel et al. (2020b) applied the AMG estimator to explore the
effects of financial development, REN, and urbanization on the EFP
in MENA countries. Their findings affirmed REN reduces the EFP
while NRE adds to it. The results were similar to those of Danish
et al. (2020) and Nathaniel et al. (2020a) for BRICS and CIVETS
respectively.
Baz et al. (2020) examined the asymmetric link between eco-
nomic growth, NRE and EFP in Pakistan from 1971 to 2014 while
controlling for capital. An asymmetric bidirectional causality was
discovered between NRE and EFP. Udemba (2020) discovered a
one-way causality from agriculture, economic growth, population
growth, and NRE to EFP. In consonance with the studies of Udemba
(2020), Nathaniel (2020) used the ARDL technique to confirm that
NRE, trade, urbanization, and economic growth increase the EFP in
Indonesia. A one-way causality also flow from economic growth to
EFP.
Ansari et al. (2020) applied the GMM technique to investigate
the impact of economic growth on both EFP and material footprint
for 37 Asian countries from 1991 to 2017. Their findings affirmed
that both variables increase the EFP and the material footprint for
the time period. Urbanization and globalization also had the same
impact on both environmental measures. Pata and Aydin (2020)
examined the effect of economic growth and hydropower con-
sumption on the EFP in six countries using the Fourier Bootstrap
ARDL procedure. They discovered that both variables do not reduce
the EFP. Ahmed et al. (2020a) examined the effect of economic
growth, urbanization and natural resource on the EFP in China.
 S. Nathaniel, S.A.R. Khan / Journal of Cleaner Production 272 (2020) 122709
Their findings showed that urbanization and economic growth
increase EFP. In their recent study, Dogan et al. (2020) revealed that
the EKC hypothesis does not exist for BRICS and Turkey (BRICST).
Rather, energy structure and energy intensity are the core de-
terminants of the EFP.
A closer look at Table 1 reveals discrepancies in the findings. The
reasons for these variations in results could be the outcome of
difference in methodology, estimation techniques, region consid-
ered, the time period, and the choice of variables.
3. Model, data and methodology
This study applies the Stochastic Impacts by Regression on
Population, Affluence and Technology (STIRPAT) model. According
to the model, environmental degradation is both a function of de-
mographic and economic factors.
It ¼ lo Ptw1 Aw2 w3
t Tt mt
From Eq. (1), I is an indicator of environmental degradation, P; A;
and T stand for population, affluence and technology respectively.
w1  w3and mare the parameter estimates and the error term
respectively. As noted by Bello et al. (2018) and Anser (2019), T can
actually be decomposed into different variables depending on the
researcher’s focus. In this study, I is captured by EFP, P by urbani-
zation, A by economic growth, and T by trade (the same measure
used by Nathaniel (2019) and Shi (2003). The model is further
augmented with the inclusion of RE. This follows the studies of
Anser (2019) and Bello et al. (2018).
Thus, the expanded model is specified as:
EFPt ¼ lo URBw1 w2 w3 w4 w5
t GDPt TRDt NREt RENt mt
For uniformity, the variables were further divided by population
in order to express them in per capita term.
efpt ¼ lo urbw1 w2 w3 w4 w5
t gdpt trdt nret rent mt
The lower-case letters efp; urb; gdp; trd; nre; and ren are the per
capita terms of each of the variables. The linearized model is shown
in equation (4).
lnefpt ¼ w0 þ w1 lnurbt þ w2 lngdpt þ w3 lntrdt þ w4 lnnret
þ w5 lnrent þ mt

1=2
TNðN  1Þ
CD ¼ r
b (5)
2
The study considered six ASEAN countries. The data for the
study started in 1990 and ended in 2016. The time period was
sorely based on data availability. See Table 2 for the sources and
measurements of the variables.
4. Results and discussions
4.1. Methodology
The methodology section of this study proceeds with the CD
tests. This test is important for various reasons. The CD test gives
direction on the appropriate estimation technique to adopt. If CD is
ignored, the estimators will become inconsistent, and results will
be meaningless (Dong et al., 2018). Three different CD tests are used
in this study. The equation for this test is given as;


PN1 PN
From Eq. (5), br ¼ NðN1Þ
2
i¼1 rij ; where c
j¼iþ1 c rij represents
3
the pair-wise cross-sectional correlation coefficients of residuals
from the ADF regression. N and T are panel size and sample
respectively. In the presence of CD, the first-generation unit root
tests will be rendered inefficient. As a result, the second-generation
unit root tests (CIP and CADF) were applied to complement the
former. Following Pesaran (2007), the test equation is specified as:
X
n
Dyit ¼ Dait þ bi xit1 þ ri T þ qij Dxi;tj þ εit (6)
j¼1
Where ait ; D;xit ;Tand εit are the intercept, difference operator, study
variables, time span and error term respectively. The long run
relationship among the variables was examined using the
Westerlund (2007) test. The error correction approach of the test is
presented in below as:
X
pi X
pi
Dyit ¼ d’i dt þ ai yit1 þ l’i xit1 þ aij Dyitj þ gij Dxitj þ eit
(1) j¼1 j¼0
(7)
ai is the error correction parameter. dt ¼ ð1; tÞ’ comprises the
deterministic components (constant and trend) with dt ¼ ðdi1 ; di2 Þ’
representing vector of parameters. Four tests (based on the OLS
estimates of ai in Eq. (7)) were developed to investigate the exis-
tence of cointegration. Two of these four tests are the group mean
statistics given as:
P abi and. G ¼ 1 PN T abi
Gt ¼ N1 N a
i¼1
SEðc ai Þ
N bi ð1Þ
i¼1 a
The standard error of abi is represent by SEð ac i Þ. The semi-
parametric kernel estimator of ai ð1Þis abi ð1Þ. The remaining two
(2) tests are the panel mean tests which suggest that the whole panel is
cointegrated. They are given as follows:
Pt ¼ abi and. Pa ¼ T a b
SEðc
ai Þ
The AMG algorithm of Bond and Eberhardt (2013) which can
(3)
accommodate nonstationary variables (Destek and Sarkodie, 2019)
and robust for CD (Baloch et al., 2019a) was applied to explore the
influence of each variable on the environment.
5. Empirical results and discussion
(4)
Table 3 presents the properties of each of the variables
employed in the study. From the results, the smallest and largest
mean values of EFP is 17.1 and 19.5 for Singapore and Indonesia
respectively. The mean GDP value of (6.21) suggest that Vietnam is
the least developed of these countries, while Singapore with (10.4)
is the richest.
On average, Indonesia and Vietnam have consumed more REN
(3.80) and (3.44) respectively, than the remaining countries, while
Singapore consumed the lowest (0.73).
Table 4 presents the unit root tests in Panel A, with the CD tests
in Panel B. The results in Panel A suggest that all the variables are
I(1), as such, they are nonstationary in their level form. The LLC, IPS,
and PP-Fisher do not account for CD, therefore, their results may be
misleading. On the other hand, the CIP and CADF produce robust
estimates amidst CD. The findings of all the tests affirmed that all
the variables are stationary only after their first difference. Panel B
portrays the evidence of CD in the constructs. When variables are
I(1), the need to ascertain their movements in the long-run arises.
The results in Panel A necessitates the Westerlund test to investi-
gate the long-run cointegrating relationship among the variables
(see Panel C in Table 5).
The results in Table 5 are in harmony. Since the P-values of Gt
4 S. Nathaniel, S.A.R. Khan / Journal of Cleaner Production 272 (2020) 122709

Table 1
Summary of Studies that used Ecological Footprint to Capture Environmental Quality.

Author (s) Country/Region Period Variable(s) Considered Methodology Findings

Destek and 24 OECD 1980 EFP, REN, NRE, Trade, GDP, GDP2. FMOLS, DOLS, CCEMG. REN consumption reduces EFP. NRE consumption
Sinha countries e2014 increases EFP.
(2020)
Dogan et al. MINT 1971 FTR, EXP, URB, and FDV, IMP, REN. Panel ARDL FF, EXP, URB, and FD increase EFP
(2019) e2013
Alola et al. Europe 1997 Trade policy, GDP, FTR, TOP, REN, NRE PMG REN adds to environmental quality.
(2019a) e2014
Wang and 14 SSA 1990 EFP, REN, URB, GDP, NRE. AMG REN adds to environmental quality. GDP, NRE, and
Dong e2014 URB increase EFP.
(2019)
Hassan et al. Pakistan 1970 EFP, BIO, GDP, Natural resources, URB, HCP. ARDL Natural resources increase EFP.
(2019a) e2014
Hassan et al. Pakistan 1971 EFP, HCP, GDP, Biocapacity, ARDL Biocapacity and GDP add to EFP, while HCP reduces it.
(2019b) e2014
Aydin et al. Europe 1990 EFP (forest area, cropland, grazing land, built-up PSTR approach Economic development is majorly responsible for
(2019) e2013 land, carbon-absorption land, and, fishing environmental pressure.
grounds) GDP.
Destek and 11 countries 1977 EFP, NRE, FDV, GDP AMG A feedback causality exists between EFP and GDP
Sarkodie (newly e2013
(2019) industrialized)
Baloch et al. 59 BRI 1990 GDP, EFP, NRE, FDI, FDV, URB. Driscoll-Kraay panel GDP, EFP, NRE, FDI, FDV, URB pollute the
(2019a) e2016 regression model environment.
Nathaniel South Africa 1965 EFP, GDP, URB, NRE, FDV. ARDL URB and NRE contribute to environmental
et al. e2014 deterioration.
(2019)
Mikayilov Azerbaijan 1996 EFP, Tourism receipt, Trade, NRE, URB, Time-varying NRE and trade increase EFP.
et al. e2014 Government effectiveness, coefficient
(2019) cointegration
approach
Sabir and South Asian 1975 EFP, GDP, TOP, FDI, GLO. Panel ARDL FDI and TO exact a positive impact on EFP.
Gorus countries e2017
(2019)
Ahmed et al. Malaysia 1971 EFP, GLO, Economic growth, NRE, Population ARDL GLO is not a significant determinant of EFP in
(2019) e2014 density, FDV. Malaysia.
Ahmed and India 1971 EFP, TOP, HCP, GDP, GDP2, NRE, URB. ARDL HCP reduces EFP, while NRE increases EFP. HCP
Wang e2014 Granger causes EFP.
(2019)
Zafar et al. USA 1970 EFP, FDI, HCP, Natural resources, GDP, NRE. ARDL Natural resources and HCP reduce EFP. NRE and GDP
(2019b) e2015 increase EFP.
Danish and Next-11 1971 EFP, URB, NRE, GDP. CCEMG URB drives EFP. The moderating effects of URB and
Wang Countries. e2014 GDP reduces EFP.
(2019)
Fakher OPEC countries 1996 EFP, URB, POP density, POP, TOP, FDI, NRE, HCP, Bayesian model GDP2, NRE, and POP density are the first, second and
(2019) e2016 GDP, GDP2. averaging third most effective variables respectively that
impact EFP.
He et al. Malaysia 1978 EFP, GDP, NRE, TOP, URB, Financial liberalization, ARDL GDP, TOP, and NRE drive EFP.
(2019) e2013 The square of financial liberalization.
Alola et al. USA 1960 EFP, Cooling degree days (CDD), Heating degree ARDL HDD is negatively impacted by EFP. Fossil energy
(2019c) e2015 days (HDD), URB, GDP, Fossil energy consumption. consumption increases CDD, and decreases HDD.
Destek et al. EU countries 1980 NRE, REN, TOP, EFP, GDP, GDP2. FMOLS, DOLS. NRE increases EFP, while REN and TOP abate it.
(2018) e2013
Ulucak and 45 countries 1961 GDP, EFP, HCP, BIO, TOP continuously updated The EKC hypothesis was confirmed for the three sub-
Bilgili e2013 fully modified (CUP- divisions.
(2018) FM)
Sarkodie 17 Africa 1971 Agricultural land, CO2 emissions, EFP NRE, FTR, Fixed and Random FTR, NRE, BRT, Agricultural land are culpable for
(2018) countries e2013 Food production, GDP, GDP2. effect models. environmental degradation.
Liu et al. China, Korea, 1990 Trade diversification, GDP, EFP, GDP2. ECM The EKC is valid in Japan and Korea.
(2018) Japan e2013
Bello et al. Malaysia 1971 EFP, CO2, Carbon footprint, Water footprint, GDP, ARDL URB is not harmful to the environment.
(2018) e2016 GDP2, URB, Fossil fuels.
Solarin and 20 countries 1982 EFP, FDI, NRE, URB, GDP. AMG NRE and GDP increase pollution for all countries.
Al-Mulali e2013
(2018)
Nathaniel Coastal 1980 EFP, FDI, NRE, URB, GDP. Quantile Regression FDI and URB reduce EFP.
et al. Mediterranean e2016
(2020d) Countries

Note: PSTR: Panel Smooth Transition Regression model; AMG: Augmented Mean Group; BRI: Belt and Road. TOP: Trade openness; URB: Urbanization; HCP: Human Capital;
NRE: Non-renewable energy; FDV: Financial Development; GLO: Globalization; FDI: Foreign Direct Investment; BIO: Bio capacity; IMP: Import; EXP: Export; LEX: Life Ex-
pectancy; TRD: Trade; FTR: Fertility Rate; GHGs: Green House Gas’; ARDL: Auto Regressive Distributed Lag model; DOLS: Dynamic Ordinary Least Squares; ECM: Error
Correction Model; FMOLS: Fully Modified Ordinary Least Squares; CCEMG: Common Correlated Effects Mean Group.
Source: Authors’ compilation.
 S. Nathaniel, S.A.R. Khan / Journal of Cleaner Production 272 (2020) 122709 5

Table 2
Description of variables.

S/N Variables Measurement Source Symbols

1. Energy use kg of oil equivalent per capita WDI (2019) NRE

2. Urbanization percentage of total population ✓ URB
3. Trade % of GDP ✓ TRD
4. GDP per capita in constant 2010 USD ✓ GDP
5. Renewable Energy % of total energy consumption ✓ REN
6. Ecological Footprint global hectares per capita GFN (2019) EFP

Sources: Author’s compilation, 2019. Note: GFN is Global Footprint Network.

Table 3 the region. This is in line with the findings of Munir et al. (2020),
Descriptive statistics. Suzuki and Nijkamp (2016), Heidari et al. (2015), Saboori and
Countries Statistics EFP GDP NRE REN TRD URB Sulaiman (2013) for the same region. Every economy needs the
Indonesia Mean 19.5 7.80 6.59 3.80 4.02 3.74
energy to grow/develop. However, the consumption of NRE sources
Standard Deviation 0.18 0.21 0.14 0.14 0.16 0.16 adds to environmental degradation. On the other hand, as the
Maximum 19.8 8.21 6.78 4.07 4.56 3.96 environment keeps deteriorating, it will be difficult for growth to
Minimum 19.2 7.44 6.29 3.62 3.81 3.42 be sustained. This, of course, is not in consonance with the tenet of
Observation 27 27 27 27 27 27
the SDGs. The possibility abounds that if ASEAN, and the world in
Malaysia Mean 18.2 8.88 7.66 1.83 5.18 4.13
Standard Deviation 0.25 0.22 0.24 0.34 0.14 0.12 general, continue along the path of exponential economic growth,
Maximum 18.8 9.26 8.00 2.48 5.39 4.29 emanating from the exploitation and consumption of natural re-
Minimum 17.6 8.42 7.09 1.33 4.92 3.90 sources, the impacts that society will cause the environment will be
Observation 27 27 27 27 27 27
irreversible and harmful. In this way, in planning to abate and
Philippines Mean 18.3 7.47 6.13 3.55 4.39 3.83
Standard Deviation 0.14 0.16 0.05 0.18 0.20 0.01
prevent the impacts of climate change, policymakers should
Maximum 18.5 7.82 6.23 3.95 4.68 4.68 consider approaches that integrate aspects of environmental edu-
Minimum 18.1 7.27 6.02 3.35 4.09 3.81 cation, cultural patterns, consumer responsibility, respect for na-
Observation 27 27 27 27 27 27 ture, and recognition of the intrinsic value of nature and life
Singapore Mean 17.1 10.4 8.53 0.73 5.88 4.60
(Burgui, 2015; Perkins et al., 2018; Martínez et al., 2018).
Standard Deviation 0.28 0.25 0.13 0.22 0.10 0.00
Maximum 17.5 10.8 8.90 1.63 6.09 4.60 Results further revealed that REN contributes insignificantly in
Minimum 16.4 10.0 8.23 0.47 5.74 4.60 mitigating environmental degradation. This points to the inade-
Observation 27 27 27 27 27 27 quate investment and consumption of REN in the region. Most
Thailand Mean 18.7 8.27 7.15 3.13 4.69 3.56 countries in the region are after growth, as policies are directed
Standard Deviation 0.19 0.23 0.28 0.14 0.22 0.16
Maximum 19.0 8.62 7.59 3.51 4.94 3.84
towards achieving development with little or no attention paid to
Minimum 18.3 7.82 6.60 2.99 4.32 3.38 the environment. Growth and environmental quality are two
Observation 27 27 27 27 27 27 different sides of the same coin. Once environmental quality im-
Vietnam Mean 18.1 6.21 6.77 3.44 4.88 3.76 proves, the former can easily be sustained. This finding suggests an
Standard Deviation 0.45 0.61 0.34 0.28 0.76 0.32
improvement in environmental quality if the consumption of REN
Maximum 19.1 8.11 6.55 4.11 5.13 3.23
Minimum 17.6 6.23 5.77 3.15 4.12 3.00 improves in the ASEAN region. There is a dire need for ASEAN
Observation 27 27 27 27 27 27 countries to invest and promote the consumption of REN in order to
Panel Mean 1.26 889 27.3 27.3 151 52.2 mitigate pollution and promote sustainable growth. However,
Standard Deviation 922 132 169 20.5 104 24.6 reducing the consumption of energy in any system does not directly
Maximum 4.29 529 737 76.0 441 100
Minimum 141 433 260 0.19 45.5 20.2
imply reducing the environmental impacts that the system may be
Observation 162 162 162 162 162 162 causing. There are cases where the use of more efficient technol-
ogies can, in the end, increase total energy consumption (rebound
Source: Author’s computation.
effect). Therefore, technical-technological advances are not a per-
manent solution for ASEAN energy and the current global energy
and Ga (group mean statistics), and Pt and Pa (panel mean tests) are crisis. Therefore, special focus should be accorded to ethics, be-
significant at 5%, then cointegration exist. haviours, organizational and management culture, consumption
The AMG results in Table 6 suggest that NRE contributes patterns, education of society, and socio-environmental re-
significantly to environmental degradation in the ASEAN region. sponsibility (Varela-Candamio et al., 2018; Rodríguez et al., 2019).
This did not come as a surprise since the energy mix in the region is A one per cent increase in trade will result in about 13% increase
dominated by fossil fuels. Studies like (Tuna and Tuna, 2019; Nasir in environmental degradation. Trade has improved tremendously
et al., 2019; Wang et al., 2016; Baek, 2016) had earlier discovered a among the ASEAN countries, and between the ASEAN countries and
similar relationship between NRE and the environment in ASEAN the rest of the world. Trade integration in the region has resulted in
countries. The horrendous effects of NRE on the environment is not lots of benefits especially in the area of foreign technology, foreign
peculiar to the ASEAN region alone, Zhang et al. (2019) discovered a investment, and international trade. This also comes with an in-
similar trend for BRICS, Gorus and Aydin (2019) and Gorus and crease in productivity, output, and growth. Due to the improvement
Aslan (2019) for MENA, Ssali et al. (2019) and Nathaniel and in trade, the region’s growth rate has averaged 5.5% in the past
Iheonu (2019) for sub-Sahara Africa, and Sinha et al. (2017) and three decades (Ahmed et al., 2017). This finding shows that ASEAN
Sinha et al. (2019) for N-11 countries. countries are involved in trade activities (emission-intensive trade)
As earlier mentioned, economic growth in the ASEAN region has that deteriorate environmental quality. Ahmed et al. (2017) and
been unprecedented over the years. Unfortunately, the region is Nathaniel et al. (2020c) had earlier discovered the same for the
growing at the expense of its environment. Findings revealed that ASEAN region and Africa respectively. On the flip side, unlike NRE,
growth contributes about 0.49% to environmental deterioration in REN, and trade, urbanization exacts no harmful impact on the
6 S. Nathaniel, S.A.R. Khan / Journal of Cleaner Production 272 (2020) 122709

Table 4
Unit root and cross section dependence tests.

EFP GDP NRE REN TRD URB

PANEL A
Levels
Levin, Lin, and Chu t-test 3.22 3.23 3.39 3.12 2.11 4.67
Im-Pesaran-Shin test 2.67 4.77 0.54 4.54 3.45 2.89
Pearson-Fisher Chi-square test 24.2 15.2 14.1 22.5 14.8 15.5
Cross-sectional augmented IPS test 1.88 0.45 3.78 1.22 0.45 3.44
Cross-sectional augment 1.68 0.32 2.56 1.19 0.43 3.28
Dickey-Fuller test

1ST Difference
Levin, Lin, and Chu t-test 9.24** 11.1** 12.8** 10.8** 11.1** 13.9**
Im-Pesaran-Shin test 8.11** 9.33** 10.2** 12.1** 8.41** 14.2**
Pearson-Fisher Chi-square test 101.0** 101.3** 121.6** 176.2** 141.9** 132.8**
Cross-sectional augmented IPS test 3.11** 5.63** 4.11** 5.22** 3.78** 5.76**
Cross-sectional augment 2.15** 4.65** 3.25** 4.37** 3.28** 4.78**
Dickey-Fuller test

PANEL B
Breusch-Pagan LM 119.0**
Pesaran scaled LM 18.99**
Pesaran CD 9.703**

Source: Author’s computation. Note: ** shows significance at 1% level.

energy generation. This gesture has contributed to low emissions

Table 5 emanating from economic growth. The country is also more pro-
Panel cointegration test. active in fighting climate change through the acquisition of clean
PANEL A Within-Dimension (Panel) Between-Dimension (Group) technologies and the building of infrastructures compared to other
ASEAN countries. The other countries in the region can take a cue
Pedroni Statistic Weighted Statistic Statistic
from Singapore.
Statistics Further findings revealed that REN reduces environmental
V-Statistic 354.5 1.775
degradation (insignificantly) in Indonesia, Philippines, Singapore,
Rho-Statistic 0.323 0.039 0.584
PP-Statistic 3.274** 2.895** 5.974** Thailand, and Vietnam. These countries consume REN, but the
ADF-Statistic 1.816* 1.914* 2.091* consumption of renewables is not enough to mitigate environ-
PANEL B mental deterioration. This finding suggests that the quality of the
Fisher Kao environment in the ASEAN region will improve if these countries
No of CE(s) Trace test Max-Eigen test 4.650**
intensify the consumption of clean energy sources (like solar, wind,
None 183.8** 93.53** geothermal, tide, etc.). Of the six selected countries, Malaysia,
At most 1 107.7** 54.58** Indonesia, Philippines, Singapore, and Vietnam follow predomi-
At most 2 61.80** 29.70** nantly emission-intensive trade, except Thailand. In some of these
At most 3 39.24** 22.06*
countries (especially, Indonesia, Vietnam, and Malaysia) the export
At most 4 27.31** 16.18
At most 5 30.70** 30.70** sector is dominated by agriculture and manufacturing which de-
mands the use of electricity and extensive heat. Conversely, the
PANEL C
Westerlund
case of Thailand is a reflection of the less emission-intensive service
sector.
Statistic Value Robust P-value
Urbanization deteriorates the environment in Thailand,
Gt 3.343 0.034*
Ga 3.142 0.001** Indonesia, and Vietnam, but the situation is even more severe in
Pt 5.476 0.006** Singapore. According to the UNESCO report in 2016, Singapore,
Pa 4.453 0.041* fondly called ‘the Lion City’ remains the most urbanized country in
Source: Author’s computation. Note: ** and * show significance at 1% and 5% levels Southeast Asia. About a hundred per cent of Singaporeans live in
respectively. urban centres (Ali et al., 2017; Central Intelligence Agency, 2017).
Urbanization propelled deforestation in Singapore (Tan et al., 2016;
environment. Therefore, for the full panel, the significant sources of Tan & bin Abdul Hamid, 2014), and adds to a lot of environmental
environmental degradation are: trading activities, NRE, and eco- problems (Robinson, 2017). The increase in urbanization has been
nomic growth. unprecedented in Indonesia. As of 2017, about one-half of Indone-
The country-specific results show that NRE is a source of envi- sians live in urban centres (UNDP, 2017). It has also been projected
ronmental degradation in the selected countries, except in the that coal will serve as the main energy source for the ever-
Philippines. This further points to the mass consumption of fossil increasing urban population due to its abundant reserve
fuels in these countries. To achieve and maintain sustainable (Kurniawan and Managi, 2018). In Vietnam, economic activities and
growth, these countries should individual, and collectively, act to basic facilities are concentrated in Hanoi City and Ho Chi Minh. The
mitigate environmental pollution. In a slightly different subset, concentration of basic facilities in urban centres encourages rural-
Indonesia, Malaysia, Philippines, Singapore, and Thailand are urban migration. Fan et al. (2019) had earlier discovered the same
currently witnessing the negative consequences of economic for Vietnam.
growth on their environment. Growth in these countries is not From Table 8, a feedback causality exists between EFP and REN.
environmentally friendly. This result appealing. The negative effect GDP drives trade and REN consumption. This is an indication that
of growth on the environment is particularly not severe in income, that is, economic growth, promotes the consumption of
Singapore because of its reliance on natural gas, instead of coal, for REN. A one-way causality flows from urbanization to NRE
 S. Nathaniel, S.A.R. Khan / Journal of Cleaner Production 272 (2020) 122709 7

Table 6
AMG estimate result.

Dependent Variable: lnEFP

Variables Panel Indonesia Malaysia Philippines Singapore Thailand Vietnam

lnNRE 0.269*** 0.158 0.491** 0.060 0.196 0.900** 0.221**

(0.075) (0.671) (0.013) (0.797) (0.259) (0.004) (0.001)
lnGDP 0.494** 0.368** 0.795** 0.653** 0.956*** 0.292 0.099
(0.002) (0.007) (0.000) (0.001) (0.077) (0.310) (0.891)
lnREN 0.144 0.101 0.132 0.305 0.053 0.026 0.515
(0.123) (0.830) (0.322) (0.054) (0.618) (0.872) (0.167)
lnTRD 0.137** 0.116 0.296 0.189** 0.233 0.052 0.146
(0.001) (0.112) (0.156) (0.006) (0.926) (0.632) (0.153)
lnURB 0.619 0.989 2.230 3.640 0.201** 0.385 2.760
(0.495) (0.234) (0.220) (0.112) (0.004) (0.397) (0.125)
CONS. 14.50** 18.78** 14.38* 28.12** 5.135 8.606** 11.94**
(0.000) (0.000) (0.026) (0.000) (0.283) (0.000) (0.229)

Note: **, *and *** show significance at 1%, 5% and 10% levels respectively.
Source: Author’s computation.

consumption. Urban areas consume more energy than rural areas. ignored, it is recommended that ASEAN countries revisit policies
As urbanization deepens, energy consumption (NRE) is bound to leading to sustainable trade and economic growth, and the reduc-
increase. tion in environmental deterioration.
From the findings, only one of the selected six countries can
achieve a sustainable environment with economic growth. For the
6. Conclusion, policy direction, and implication for other 5 ASEAN countries, an improvement in environmental reg-
sustainability ulatory standards, especially as it pertains to REN technologies is
sacrosanct. The aforementioned regulatory actions should start
This study examined the effect of REN and NRE consumption, with the introduction of environmental taxes, defining the public
economic growth, and urbanization on EFP from 1990 to 2016 in six property rights, and removal of obnoxious subsidies. All these will
selected ASEAN countries. The evidence of CD informed the use of help internalize the horrendous environmental externalities
panel estimation techniques that addresses CD and heterogeneity. emanating from human activities and put the countries on track
The results revealed that economic growth, trade, and NRE towards achieving the SDGs by 2030. Now, apart from improving
contribute to environmental degradation in ASEAN countries. On the regulatory standards to achieve the objectives of the SDGs,
the other hand, REN declines environmental deterioration, though policymakers in these countries have to increase the environmental
insignificantly. Further findings showed a one-way causality from awareness of their citizens. To achieve this (environmental
urbanization to NRE consumption. Since the environmental cost awareness), the people-private-public partnership is required. The
emanating from trade integration and economic growth cannot be benefits of this partnership towards achieving the SDGs objectives
Table 8 is hydra-headed. For instance, citizens will be better initiated with
D-H granger non-causality test. the benefits of RE solutions which will aid the smooth transition
from NRE to REN consumption. Also, new vocational opportunities
Null Hypothesis W-bar Z-bar Probability
could emerge from the implementation of cleaner production
GDP s > EFP 2.978 0.739 0.479
processes. Worthy of note is that cleaner production could actually
EFP s > GDP 3.756 0.304 0.738
NRE s > EFP 0.695 0.344 0.708
be a right step in the right direction towards achieving the SDGs by
EFP s > NRE 3.456 0.327 0.721 2030.
URB s > EFP 2.654 0.498 0.608 These countries have diverse cultures, beliefs, and orientation.
EFP s > URB 1.556 0.458 0.633 Therefore, it will be difficult to implement a “blanket policy” that
TRD s > EFP 1.342 0.204 0.815
will be in tandem with each countries idiosyncrasy. As such, poli-
EFP s > TRD 4.456 1.457 0.236
REN s > EFP 2.546 2.379 0.096 cymakers in each of these countries should take cognizance of their
EFP s > REN 7.321 5.621 0.004 peculiarity in terms of cultural patterns, consumer responsibility,
NRE s > GDP 1.654 1.879 0.812 respect for nature, recognition of the intrinsic value of nature and
GDP s > NRE 2.564 1.751 0.177
life, and environmental education of the citizenry when initiating
URB s > GDP 3.245 0.470 0.714
GDP s > URB 1.313 0.432 0.625
policies relating to environmental sustainability.
TRD s > GDP 8.453 4.076 0.649 The region needs energy-efficient technology. The consumption
GDP s > TRD 7.543 5.851 0.003 of REN will create a good balance between environmental degra-
REN s > GDP 2.987 0.068 0.825 dation and sustainable economic growth. If the ASEAN countries
GDP s > REN 1.342 0.551 0.022
keep consuming NRE, without gradually shifting to renewables,
URB s > NRE 3.432 3.449 0.034
NRE s > URB 0.342 0.927 0.398 then the region’s desire to attain a sustainable environment amidst
REN s > NRE 3.452 1.830 0.164 economic growth will be a journey in sheer futility. One sure way to
NRE s > REN 2.657 0.622 0.538 improve environmental quality and energy efficiency in the region
TRD s > URB 1.932 0.304 0.760 is through the enhancement of policy coordination in both the
URB s > TRD 3.365 0.727 0.485
REN s > URB 1.432 0.902 0.408
energy and economic sectors. Aggressive investment in REN and
URB s > REN 5.380 1.347 0.263 the adoption of environmentally friendly technologies will help
NRE s > TRD 4.574 1.054 0.351 mitigate emissions and uphold environmental sustainability.
TRD s > NRE 9.564 4.062 0.091 For the household, the transition to REN can actually be smooth
TRD s > REN 3.564 1.612 0.203
without harming the growth pattern if the government can provide
REN s > TRD 3.553 1.439 0.240
loan at a subsidized rate, and avail the household with interest rate
Source: Author’s computation. Note: The symbol s> represents “does not cause.”
8 S. Nathaniel, S.A.R. Khan / Journal of Cleaner Production 272 (2020) 122709
holiday and tax rebate. All these will provide little more than a
temporal palliative to the household. On the other hand, industries
with a higher level of EFP should be charged with a higher interest
rate which will serve as an incentive to cleaner industries, at the
detriment of dirtier industries. Urbanization arises from discrep-
ancies in development factors like basic amenities, household in-
come, infrastructural provision, etc. Therefore, in countries like
Thailand, Indonesia, Vietnam, and Singapore where urbanization
pose a problem to the environment, the adequate provision of in-
frastructures and basic amenities in the rural areas (except in
Singapore where urbanization is 100%), will not only curtail the
upward surge in urbanization and its anomaly, but also ensure
economic and environmental sustainability.
This study has some limitations. Data were not available for
some determinants of ecological footprint. More so, the ecological
footprint encompasses six categories of bio productive land use
type (grazing land, forest land, cropland, ocean, carbon footprint,
and build-up land), but this study discussed EFP only through the
energy. Future researchers could leverage on these limitations.
CRediT authorship contribution statement
Solomon Nathaniel: Writing - original draft, Data curation,
Formal analysis, Methodology. Syed Abdul Rehman Khan: Writing
- review & editing.
Declaration of competing interest
There is no conflict of interest.
Appendix A. Supplementary data
Supplementary data to this article can be found online at
https://doi.org/10.1016/j.jclepro.2020.122709.
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