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© 2024 AESS Publications. All Rights Reserved.
Energy, economy, financial development, and ecological footprint in
Singapore
Asif Raihan Institute of Climate Change, Universiti Kebangsaan Malaysia, Bangi 43600,
Selangor, Malaysia.
Email: asifraihan666@gmail.com
ABSTRACT
Article History
Received: 4 January 2024
Revised: 13 February 2024
Accepted: 1 March 2024
Published: 20 March 2024
Keywords
Climate change
Ecological footprint
Economic growth
Energy use
Financial development
Sustainable development.
JEL Classification:
C50; C58; O16; O44; P18; Q01;
Q50; R11.
The escalating energy consumption resulting from rapid economic expansion is causing
a decline in ecological health, therefore exacerbating the issue of climate change on a
global scale. The juxtaposition of Singapore's ranking as having the most robust
financial market with the largest ecological deficit globally implies the potential validity
of the trade-off theory. The purpose of this study is to analyze the influence of
Singapore's financial growth, energy use and economic development on the nation's
ecological footprint. The investigation applied the Auto Regressive Distributed Lag
(ARDL) method by using the annual time series data spanning from 1979 to 2021. The
stationarity of data was confirmed by using several unit root tests. The ARDL bounds
test revealed evidence for long term cointegration among the variables. The empirical
results exposed that a 1% upsurge in financial growth, energy use, and economic
expansion leads to a corresponding long-term increase in ecological footprint of 0.77%,
1.11% and 0.32%, as well as short-term increases of 0.44%, 0.61%, and 0.13%,
respectively. Several diagnostic tests were used to confirm the accuracy of the ARDL
outcomes. The findings of the analysis hold significant relevance for policymakers as
they can inform the development of prudent policies that promote sustained economic
prosperity without compromising environmental integrity.
Contribution/ Originality: This study investigates the energy-economy-environment nexus in light of
financial development and ecological footprint in the context of Singapore.
1. INTRODUCTION
Climate change is widely recognized as a significant global challenge in the 21st century (Rajput, Singh, Singh,
& Mall, 2023). It has garnered considerable attention from researchers, policymakers, and professionals affiliated
with international organizations focused on sustainable development (Raihan et al., 2023). Given the
aforementioned factors, it is evident that the preservation of the environment holds paramount importance for
nations, particularly those that have ratified the Paris Agreement (Saud, Chen, & Haseeb, 2020). The emission of
greenhouse gases (GHGs), leading to an increase in global temperatures (Yuan et al., 2023) and consequently
disrupting ecological balance, is the primary and significant factor responsible for environmental degradation
(Ahmed, Wang, Mahmood, Hafeez, & Ali, 2019). While carbon dioxide (CO2) emissions are recognized as the
primary contributor to GHG emissions and the underlying cause of climate change, human activities, play a
significant role in this phenomenon. Specifically, the consumption of energy derived from fossil fuels, water waste
management practices, deforestation activities, and fertilizer production are additional factors that contribute to the
degradation of the ecosystem (Wang & Azam, 2024). Previous research utilized ecological footprints as a proxy for
Energy Economics Letters
ISSN(e): 2308-2925
DOI: 10.55493/5049.v11i1.5027
Vol. 11, No. 1, 29-40.
© 2024 AESS Publications. All Rights Reserved.
URL: www.aessweb.com