Energy, Forests and Environmental Sustainability: A Comparative Analysis of Developed and Developing Economies

Abstract

The use of fossil fuels is essential for economic growth, but it also creates environmental hazards that cause 5 million people to die every year. The use of renewable energy is limited because of financial constraints, and there is a need to find ways to decouple fossil fuel consumption and pollution. This study provides a way forward by introducing forest as a moderator. This study has taken data from all countries of the world from 2011 to 2021 and estimated the impact of forests, energy consumption, forest-energy moderator, population, and gross fixed capital formation on the environment. Leveraging the Feasible Generalized Least Squares (FGLS) estimation technique to address heterogeneity and outliers, the study reveals that while the effects of forests and energy consumption align, population density and gross fixed capital formation exert disparate influences on the environment in developing and developed nations. The incorporation of forests as a moderator emerges as a consistently effective measure.