The Role of Sustainable Energy in Reducing Environmental Degradation in Algeria: An ARDL Bounds Testing Approach
DOI:
https://doi.org/10.57125/FEL.2025.03.25.02Keywords:
Sustainable energy, environmental degradation, technological innovation, ARDL, AlgeriaAbstract
Most of the framework agreements on climate change call for reducing the use of fossil fuels. This constitutes a significant challenge for energy-exporting countries in a manner that minimises the burden on their economies, which puts them before the inevitability of transitioning to sustainable energy solutions. The present study explores the long-term equilibrium relationship between sustainable energy (renewable energy and energy efficiency) and the ecological footprint. It also assesses the role of natural resource rents and energy subsidies as enhancers of environmental degradation and technological innovation as an enhancer of ecological quality. This is achieved by advancing sustainable energy solutions in Algeria using the Autoregressive Distributed Lag Model (ARDL) from 1990 to 2020. Next, the experimental results indicate that despite the weak impact of renewable energies, their development can enhance environmental quality in Algeria in the long and short term. The generalised energy subsidies applied in Algeria have contributed significantly to environmental degradation in the long and short terms. In addition, technological innovation has yet to contribute to reducing environmental degradation or advancing sustainable energy solutions. Moreover, rents from natural resources and energy intensity positively impacted the ecological footprint in the short term. Finally, these results confirm that to ensure environmental sustainability, policymakers in Algeria must move towards sustainable energy projects based on green technology and cancel generalised energy subsidies to meet the increasing demand for energy related to development needs.
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