Heterogeneous effect of GHG emissions and fossil energy on well-being and income in emerging economies: a critical appraisal of the role of environmental stringency and green energy.

The new Agenda 2030 for sustainable development call for initiatives to bridge the gap between environmental protection and socio-economic development. To provide insight on the relationship between socio-economics, and ecology, the current study examines the effectiveness of environmental stringency and green energy to mitigate the effects of fossil energy and greenhouse gas emissions on human well-being and income for 12 emerging economies. The outcomes from dynamic heterogeneous panel estimators of cross-sectional-based auto regressive distributed lag and cross-sectional-augmented distributed lag indicate that: (i) green energy consumption and electricity consumption have a substantial positive effect on well-being and per capita income. (ii) The stringent environmental policy is found to decrease per capita income, but it increases well-being, while the square of environmental stringency is found to increase per capita income. (iii) Fossil energy consumption and greenhouse gas emissions have a negative effect on well-being but a positive impact on income. The outcome of U-test confirmed the presence of a U-shaped curve with a turning point (0.433) between per capita income and environmental policy stringency. This study yielded consistent results from the panel Granger causality test. Based on our findings, we may argue that it is necessary to prioritize human well-being over economic growth, and suggest several policy implications to achieve sustainable development goals.