Evaluating Natural Resources, Renewable Energy, Financial Development, and Ecological Footprint in G20 Countries

Financial instruments' development is the key factor that can be used to resolve the rising challenges of climate change and lookforward to a sustainable economy. To assess this issue in the G20 countries, the relationship between natural resources (NR), renewable energy (RE), financial development (FD), economic growth (EG), and ecological footprint during the period 1990–2018 was examined using the PMG-ARDL approach. The results show that NR and GDP have a positive and significant relationship with the ecological footprint in the short and long term. Although the FD and RE have indicated a negative and significant relationship with the environmental footprint. The relationship of human capital with the ecological footprint is significant in the short term. It is suggested that G20 countries should increase financial support to achieve sustainable development. It is also important to develop the technological aspect to reduce greenhouse emissions and household consumption of conventional energy.