Assessing the role of renewable energy consumption and trade policy in the ecological footprint as an indicator of environmental degradation using an innovative accounting approach in Iran

The purpose of this study is to investigate the effect of renewable energy consumption, trade policy, economic growth and biological capacity on ecological footprint as an indicator of environmental degradation in Iran in the period 1986 to 2021. For this purpose, in this study, the autoregressive model with wide distribution interval (ARDL) has been used to obtain long-term and short-term dynamic coefficients. The Toda-Yamamoto causality test was also used to examine the causal path The Cholesky analysis test for innovative accounting has been used to validate the estimated models. The results show that in the long run, there is a positive relationship between the biological capacity variable and the ecological footprint, but it is not statistically significant. However, there is a positive and significant relationship between trade policy variables and GDP with ecological footprint, so that in the long run, with a one percent increase in these variables, the amount of ecological footprint increases by 64.9% and 80.7%, respectively (applying pressure Upward - negative effect on environmental quality), On the other hand, there is a negative and significant relationship between the variable of renewable energy consumption and ecological footprint and increasing one percent of this variable in the long run leads to a decrease in the amount of ecological footprint by 33.9% (applying downward pressure - a positive effect on Environmental quality). The error correction coefficient obtained in this model shows that in each period, 47% of the imbalance resulting from the occurrence of shock and deviation of the short-term model from the long-term trend is adjusted and returns to its long-term trend. There is a two-way causal relationship between trade policy and the ecological footprint. Also, one-way causality from trade policy to GDP is confirmed. The results of Cholesky analysis show that the innovative shocks generated in the variables for the next 10 periods, thus affecting the ecological footprint, so that in the second period the largest share of impact compared to other variables is related to renewable energy by 3.5% But over time and at the end of the tenth period, the largest share of impact is related to GDP of 19.60%, commercial policy of 9.54%, renewable energy consumption of 7.76% and bio-capacity of 1.28%, respectively. Therefore, country-specific energy policies that increase the share of renewable energy in the energy portfolio are recommended.