Environmental consequences of population, affluence and technological progress for European countries: A Malthusian view

Abstract

This paper examines the short-run and long-run effects of economic, sociological and energy factors on environmental degradation in 28 European countries. In so doing, we employ Panel Vector Autoregressive (PVAR) and Fully Modified OLS (FMOLS) approaches on data from 1990 to 2014 in a STIRPAT (Stochastic Impacts by Regression on Population, Affluence, and Technology) framework. Key empirical results indicate that these factors may contribute to environmental improvement in the short run; however, there are adverse implications in the long-run. Specifically, economic factors including economic growth, trade openness and foreign direct investment cause environmental degradation in the under-analysis economies. The sociological factors as measured by the population growth and the level of urbanization also show a negative impact on the environmental degradation in the short-run but in the long run, both population size and urbanization increase environmental degradation. These findings are in line with the concerns raised by Thomas Robert Malthus in his Essay on the Principle of Population. With regards to the energy factors, it indicates that the renewable energies help the European environment by reducing the level of carbon dioxide emissions whereas the higher energy intensity is an ecological threat. Our results remain robust in the EKC framework.