The key challenges and best alternatives to environmental sustainability: a comprehensive study

Abstract

In the modern world, the globe has been trapped by severe challenges, and an abrupt increase in environmental deterioration (ED) is one of these. The practitioners have recently tried to suggest several green initiatives to combat rising environmental concerns, but the problem remains intact. Most economies have priorities to meet their socio-economic target, and practitioners are unaware of true challenges and best alternatives. This study makes an effort to introduce the true challenges (income, urbanization, and natural resources) and best alternative (renewable energy, information & communication technology (ICT), and circular economy) for carbon footprint in the top 28 waste re-cycled economies (WRE) throughout 2000–2021. In order to obtain robust outcomes, the present study uses the most reliable estimators, and the Q-GMM is the most prominent. The outcomes describe a positive role of income, urbanization, and natural resources in carbon footprint. On the other hand, ICT, renewable energy, and the circular economy decline ED. The renewable energy and circular economy mediating role on urbanization shows supportive behavior in sustainability but finds only a significant role of circular economy in sustainable urbanization. Using a quadratic income form, this study validates the EKC & LCC hypotheses for specified economies. On behalf of outcomes, this study suggests imperative implications to become clean & green shortly.

Introduction

Over the last few decades, the globe has faced severe challenges, and environmental stress is become one of these ^1,2. Policymakers have introduced several green initiatives to address environmental issues, but the problem remains intact ^3,4. It is indispensable to commence the chief roots of such environmental strains across the globe. Since the Industrial Revolution, most nations have tried to boost their development level at any cost. Beyond the economic growth and its severe consequences for sustainability, an exclusive debate concerning social factors cannot be ignored from this race ⁵. For instance, urbanization has remained a leading phenomenon in eye contact with most nations because it is considered a symbol of modernization in the progress of societies or nations ⁶. Most people migrate from rural to urban areas due to better facilities. Its ratio has increased worldwide in the last decade from 37 to 54% ⁷. An abrupt rise in urbanization may bring ED. As per the UN report, there are six hundred top cities across the globe that consist of 20% of the global population, 60% of GDP growth, and 70% of carbon pollution. Thus, socio-economic factors and their core role in environmental debate are essential because they cause anthropogenic activities over time ⁸. Urbanization and growth activities are also entirely connected with natural resource depletion, which may cause environmental pollution. The deep connection of growth with environmental pollution was first investigated ⁹, and later on, environmentalists classified this theme into two forms such as U-shaped and inverted U-shaped EKC-hypothesis ^10,11. Describing both themes in detail is essential to offer a clear sketch to the reader. The inverted U-shaped curve refers to any change in income and brings carbon emission up to a certain point, but after the threshold level, it helps to decline emissions ^12,13. In the case of the U-shaped curve, it refers to a significant rise in income causing a decrease in emissions, but after a certain point, it starts to rise in environmental pollution ^14,15. Most policy analysts have blamed the excessive utilization of natural resources (NRs) for development activities as a core root of environmental stress. This trend has mainly been observed due to rapid economic growth, which pushes the industrial process to the massive exploitation of NRs. Massive wastage of NRs not only deteriorates the environmental quality but also causes an ecological deficit. ¹⁶.

By having such environmental issues (income, urbanization & natural resources consumption), this study considers some critical solutions that may be helpful to combat emissions in the case of specified economies. Under the sustainable solution, renewable energy consumption has received immense attention to deal with energy shortage at minimum environmental cost. Renewable energy has recently become more prominent across developed nations (Steiner et al., 2017) because the share of renewable energy in electricity generation was estimated to be 22% in the last decade. However, nations have unruffled it from the different green sources such as solar, hydro, wind, and geothermal to reduce environmental pressure ¹⁷. Renewable energy output is utilized in four sectors: transport, energy production, heating or cooling, and rural energy consumption. Green energy consumption source share is minor, but it’s role in emission reduction is considerable ¹⁸. The significant share of traditional energy consumption in human & economic activities also causes environmental deterioration, and the globe has thought to bring some mediators to minimize them. Thus, the world introduced the second-best alternative to working as a middleman and offers online services to reduce travelling, transaction, and time costs, ultimately reducing environmental hassle. For instance, information & communication technology is considered the best alternative to reduce non-productive human activities domestically, but there have been different opinions regarding ICT’s connection with emission levels. Some researchers believe that ICT devices have energy-intensive behavior, ultimately bringing emissions to the atmosphere ¹⁹. On the other hand, ICT also causes a decline in emissions due to its green services over 20 years. Shortly, ICT can bring some exciting contributions to sustainability themes and economies heavily reliant on policy analysts to maximize its usage for human development ²⁰. The improper utilization of developmental activities has brought massive wastage domestically and caused biodiversity losses, so economies have recently focused on the circular economy to manage such wastage and protect the environment. With a significant rise in rational behavior towards environmental issues, the circular economy has received vast attention in dealing with severe environmental problems. Most production units put waste in common places, and societies face numerous challenges. The European Union recently declared that half of total emissions come from daily wastage by productive & non-productive activities. In such a scenario, the circular economy has become the last resort to solve this issue by efficiently allocating wastage in energy production ²¹. This initiative not only tries to secure the environmental quality but also fills-out the energy shortage.

The current study aims to describe the overall environmental challenges (income, urbanization & natural resources) and their best solutions (renewable energy, ICT & circular economy) for the top waste re-utilize economies (WRE) from 2000 to 2021. It is imperative to introduce this study’s contribution to existing literature properly. Firstly, this study considers income a determinant of environmental degradation because most economies have tried to speed up their development plans to compete with other nations at any cost of negative externalities. It’s a common belief that economies damage their available natural and other resources connected with sustainability and development plans, bringing severe environmental deterioration with rapid economic growth. Also, the present study offers a comparative analysis by using the load capacity factors as an alternative proxy of explained variables to demonstrate the shape of the load capacity curve (LCC) in specified economies. Such inclusion may guide policymakers to suggest eco-friendly suggestions for a green environment. Secondly, social factors such as urbanization are important environmental determinants that cannot be excluded from the development models. For instance, its immense demand for society’s development and interconnected sectors may bring environmental pollution via the usage of energy-intensive products. Rapid urbanization would cause environmental stress at the domestic level, but this connection has not yet been answered clearly, and practitioners are curious to know the actual situation in WRE economies. To answer this question, the current study and its outcomes may guide policymakers to take green urbanization initiatives. Thirdly, the depletion of natural resources (NRs) has remained a rich source of revenue for earning and investing in development plans. The exploitation of NRs has recently been observed due to industrial development plans. The selected economies also believed in globalization, exporting goods & services, and extracting available natural resources for trade activities that further cause environmental deterioration. The current theme also considers natural resource exploitation as an environmental determinant to answer whether it raises domestic environmental pollution. Fourthly, renewable energy consumption (RE) has become a leading phenomenon in combating emissions, and most economies immeasurably have investments in it but have not yet reached their threshold levels. The environment-development model with renewable energy could bring a sound message to policy analysts. It is a common view that green energy secures environmental sustainability and reduces some energy burden to improve the balance of payment.

Fifthly, asymmetric information regarding the market situation is diminished due to information & communication technology (ICT), which results in the ultimate reduction in travelling, transaction, and time costs. As a result, it has reduced a significant share of energy-intensive activities that protect environmental quality. This study also expects that the inclusion of ICT in human & economic activities would significantly decline emissions and become a green environmental measure in specified regions. Sixthly, the introduction of a circular economy at the domestic level may utilize the garbage efficiently to produce the energy for daily use and reduce environmental stress. Therefore, the specified economies have focused on circular economy and become a leading example for the globe to follow such a pattern to become clean & green shortly. The consecutive solutions (RE, ICT, and circular economy) would cause sustainability and may provide new insight for development planners to follow up under the environmental standards. Finally, this study introduces “the mediating role of renewable energy and circular economy on urbanization” and evaluates an indirect role in sustainability. Such action can bring an empirical sketch in front of legislators to resolve environmental issues via some green steps at the domestic level. Also, this theme utilizes the most robust estimators to consider the study’s objectives. Data integration, CSDs, and co-integration tests ensure data reliability and initial screening. Panel Generalized Method of Moments, Panel Vector Auto-regressive, and Panel Quantile Regression are utilized in the present study for long-term associations. Figure 1 shows the graphical presentation of the study’s contribution to existing literature.

Fig. 1

Graphical presentation of study’s contribution.

The remaining sections are classified into literature section, data & method, results & discussion, and conclusion & policy recommendations.

Summary of the past studies

The current section is crucial because it provides a detailed overview of the past studies that have been done in the vein of interest. This section is classified into two subsections that give an overview concerning urbanization and energy transition toward sustainability. Both sections consist of theoretical and empirical overviews that may help understand the linkage among the studied variables.

Linkage of urbanization with environmental deterioration

Most urbanized economies have the same pattern for their development plans to boost their industrial sector and compete with other nations. Industrial activity brings energy competition and raises environmental stress that may not be acceptable for forthcoming decades. Due to urbanization’s (UB) positive and negative externalities towards sustainability, policymakers have energetically focused on this connection and tried their best to provide better solutions. Environmentalists have proposed three different theories to investigate this connection (urbanization and environmental degradation): the Ecological Modernization theory (EMT), the Environmental Transition theory (ETT), and the Compact City theory (CCT) ²². The EMT refers to the connection between UB and emissions at the national level, and it explains the rising emission trend due to structural change in societies from low stage to moderate, bringing massive environmental deterioration at the domestic level. A later stages, countries care for environmental quality and move towards sustainability ²³. Under the ETT theory, environmental damage is linked to income level. As income rises, people invest in businesses and demand more energy, leading to significant industrial pollution. ETT and CCT theories describe urbanization’s connection with city-level emission ²⁴, and CCT theory also refers to the severe effects of urban development on environmental quality. Consequently, government intervention and technical development are considered last resort to solve specified issues, and the significant rise in public green transport may cause a decline in environmental pollution ²⁴.

Besides the empirical estimation, the present work provides the core studies directly connected with urbanization (UB) and environmental deterioration (ED). For illustration, a case study of industrialized economies ²⁵, an emphasis on the Indonesian economy ²⁶, the instance of OECD countries ⁷, the study of Newly Industrialized economies ²⁷, the case study of MENA region ²⁸, the state of China ²⁹, and the empirical study of 42 BRI economies ³⁰ have provided different outcomes regarding the connection of URB and environmental deterioration. Each study has been explained well in Table 1, where a reader can quickly review the heterogeneous response of URB with ED.

Table 1 Comprehensive literature review.

Linkages of renewable energy with environmental deterioration

Most developed economies have tried their best to boost green energy consumption in their total energy share and introduced several green initiatives that can compel ordinary consumers to focus on energy transition. The legal framework can make significant energy transitions in daily human & economic activities ³¹. Such green policies have been organized under the theme of the Paris Agreement & the Kyoto Protocol ^32,33. In the modern era of development, green energy utilization and carbon tax have a leading aim in promoting the energy transition theme across developed, emerging, and developing nations ³⁴. Most economies haven’t changed daily activities, like heating, cooling, and transport to green energy. Higher authorities across the countries are pushing consumers to use green energy as part of the energy transition theme. Green environmental policy also significantly reduces the external cost of energy transition sources such as solar, wind, and hydro panels to overcome energy utilization from primary sources ³².

The general comments regarding the energy transition and global initiatives to promote it via renewable energy to secure the environmental quality for forthcoming generations; also, this sub-section describes the most relevant case studies that connected with energy transition via renewable energy (RE) and rising pollution level. A summary is provided to glimpse past studies on green energy and emissions levels. In this order, the case of 107 economies ³⁵, 15 energy transition economies ³⁶, 66 developing nations ³⁷, 28 OECD countries ³⁸, the CPTPP economies ³⁹, 197 economies (Adekoya, et al. ⁴⁰, China ⁴¹, low-income countries ⁴², 8 Asian tourist nations ⁴³, Indian economy ⁴⁴ China economy (Chen, et al. ⁴⁵, BRICS nations ⁴⁶ and low-income economies ⁴². The above studies regarding RE and environmental deterioration are summarized in Table 1.

Linkage of income, natural resources, ICT, and circular economy to environmental deterioration

This study also focuses on other variables to demonstrate their connection with environmental degradation. Accordingly, it prefers to summarize all studies into four sections, which may help to understand the flow of Table 1.

In the first part, this empirical research summarizes all key studies that tried to investigate the non-linear relationship between income and emissions. These studies have brought two messages to the reader: either non-linear association supporting the Inverted U-shaped EKC-curve or U-shaped EKC-curve. For example, the Inverted EKC-curve is being validated by the study of 14 European economies ⁴⁷, Indian economy ⁴⁸, Ghana economy ^49,50, 56 economies ¹², China ⁵¹, and Pakistan economy ⁵². On the other hand, few studies have proved the U-shaped EKC hypothesis, i.e., ^53,54. Under the second segment, this study summarizes core studies that have tried to demonstrate the association of natural resource consumption with emissions level. These studies are Ghana’s economy ⁵⁵, G7 economies ⁵⁶, EU-5 economies ⁵⁷, SEA economies ⁵⁸, and top 10 polluted economies ⁵⁹. However, most studies have shown increased ED due to natural resource consumption.

The third section summarizes the studies related to ICT and ED. These studies have described ICT’s positive, negative, and inverted U-shaped connection with ED. Under the scenario of negative association, there have been a few studies, such as the study about cities of China ⁶⁰, the study of BRICS economies ⁶¹, and the study of China ⁶². Similarly, some studies showed a positive association of ICT with emissions, i.e., 21 SSA economies ⁶³, the MENA economies ⁶⁴, and the Chinese provinces ⁶⁵. Finally, the fourth segment summarizes some crucial studies directly associated with the circular economy and environmental degradation. These studies are Denmark’s economy ⁶⁶, Ghana’s economy ⁶⁷, Chinese cities ⁶⁸, and China’s economy ⁶⁹. Also, this study offers a list of additional studies that have worked in the same direction, which is presented in Table 1.

Literature gap & research questions

It is necessary to describe what is left by the existing literature, which this study focuses on incorporating for forthcoming practitioners. As concisely in Table 1, most studies have utilized income to validate the EKC-hypothesis but have not tried to compare this hypothesis with some attractive theme. Thus, this study considers load capacity factor (LCF) as an alternative to carbon footprint to fill such a research gap. First research question: is the load capacity curve (LCC) valid for WRE economies along with the EKC hypothesis? Similarly, in the case of urbanization (UB), existing literature has investigated its connection with ED well, but different views have been summarized. This study considers it an environmental determinant for WRE economies to bring a sound message and reduce ambiguity. Second research question: Is urbanization an eco-friendly factor in the case of WRE economies? ICT has recently been used as an attractive factor in the energy-environment model as a helper instrument to reduce environmental pressure. However different practitioners have brought different comments to the connection of ICT-emissions and are not reached on a single agenda. Existing literature has also voluntarily ignored waste-recycled economies, and this study considers it a core environmental factor that offers a right view in front of policy analysts. Third research question: Does information & communication technology (ICT) significantly reduce environmental degradation? Upto this date, natural resource consumption’s role in environmental quality has been investigated well, and all practitioners have brought different opinions to explain the actual role of NRs in sustainability. For that reason, to provide the most reliable outcomes, this study considers that specified economies may utilize their NRs revenue on development activities, which cause environmental quality or stress. This ambiguity can be managed via some robust outcomes. Fourth research question: Is excessive natural resource extraction helpful in environmental management? Recently, renewable energy consumption has been extensively utilized in the emission-development model, and validated its green role in sustainability. Some studies have shown an inverse and ambiguous outcome, which creates an uncertain situation in understanding a common theme across the globe. Thus, to obtain a reliable result for WRE economies, this study considers renewable energy themes for environmental sustainability. Fifth research question: Is renewable energy adoption an authentic instrument for sustainability? Finally, the circular economy and its green spillover effect on environmental sustainability have been debated well, but very few empirical studies have noticed such a connection. This study utilizes empirical data to offer a sound message and guide policy analysts to adopt such strategies for the sake of environmental sustainability.

Here, it is necessary to explain how this study differs from previous studies. After a detailed summary of past reviews on urbanization, energy transition, circular economy, and ED, the current study differs from existing literature in the following ways. Firstly, past studies have voluntarily ignored the most circular economies, which significantly contribute to energy generation from wastage. This study considered those specified economies to fill out the existing flaws and may try to propose some green policies under the sustainability theme. Secondly, the energy transition in the urban sector hasn’t been well investigated; it’s necessary to find a straightforward way to show how this transition influences environmental quality in the urban sector. As a result, the mediating role of RE on urbanization would bring a sound message concerning ecological sustainability. Thirdly, this study also introduces the mediating role of CE to become heterogeneous from past studies because it’s a common belief that it can manage biodiversity loss via efficient usage of garbage. That being so, this research attempts to introduce a proper channel where policymakers can understand the leading environmental problems and their solutions in the current era of development. Green management decisions can efficiently collect and utilize the waste of urbanized areas to minimize overall ecological stress. Finally, this study will use efficient estimators per data characteristics to demonstrate the study objectives and suggest green policies for environmental sustainability.

Data and methods

General wiles regarding selected variables

It is necessary to provide a detailed theoretical argument concerning each selected variable with environmental deterioration. Since the Industrial Revolution, economies have performed well to boost their development plans to compete across borders. Such rapid development activities have been done at the cost of environmental degradation in the form of environmental deterioration. To understand this connection in depth, for the first time in history⁹⁴, we have checked the growth connection with emissions and denoted it with the Environmental Kuznets Curve (EKC) hypothesis. Numerous researchers have validated this theory lately ^95,96,97. Remarkably, with the rapid development plans, the impact of human activities on environmental destruction has remained a leading policy agenda at the forefront of policy analysts. The rise in environmental pollution brings significant climate change and seriously threatens biodiversity. Most nations have focused on clean & green society development to secure the forthcoming generation. The Paris Agreement among the economies cannot be ignored because all countries have shown interest in bringing global temperature by 2 $^\circ{\rm C}$ ⁷. The most fluctuated behavior of demographic change to environmental sustainability has recently been observed. An unprecedented rise in urban activities brings excessive utilization of available resources to meet the daily demand, further increasing environmental deterioration. Natural resource consumption (NRs) is another leading environmental factor influencing sustainability, and the overexploitation of natural resources affects biodiversity and causes massive atmospheric pollution ⁹⁸. Understanding sustainable environment or growth is crucial before moving forward to green energy initiatives and their effects on environmental quality. Rapid economic growth has remained a key challenge behind all environmental issues ¹⁶, and nations have extracted their natural resources from industrial development and construction. Commonly, the social role of the energy sector is another direction that not only influences the sustainability level but also causes human dissatisfaction ³⁶. Economies have also tried to improve technology to utilize the maximum share of green energy, and this share has increased to support rapid growth with less biodiversity loss in developed economies due to its green effect.

Information and communication technology (ICT) significantly affects economic growth and environmental quality. Researchers across the different regions have classified the role of ICT into three categories, i.e., first, second, and third order. Therefore, it is essential to discuss the theoretical background of ICT with the three mentioned categories here. In the literature, the first-order effect is associated with the positive effect of ICT on environmental degradation. ICT can protect the environment quality via the dematerialization of production, which relates to a less resource-intensive economy ⁹⁹. Due to growing ICT networks such as online shopping, work-from-home, and other online activities, the facilities significantly reduce energy and ultimately decline emissions. The second degree of ICT relates negatively to environmental quality through the production and consumption of ICT-related material. It is estimated that approximately three percent of emissions are released annually by ICT devices ^100,101 because a massive amount of energy is needed to install these devices. A well-known economist represented the concept of substitution and compensation effect in the field of microeconomics, and this factor (ICT) can raise the compensation effect against the substitution effect ¹⁰². The third degree of ICT is known as the rebound effect. It implies the positive association of ICT with environmental quality and energy use. This kind of advantage causes a rise in energy efficiency and generates additional pressure on using ICT products, i.e., LCDs, Laptops, and tablets ¹⁰³. In the recent decade, numerous researchers have tried to estimate the association of ICT with environmental degradation to validate the three degrees of ICTs. Finally, the circular economy has also received key attention to re-utilize the available resources and reduce biodiversity losses. The specified economies have become the leading example for the globe to consider their waste re-utilization pattern in energy generation to keep the environment clean & safe.

The current empirical research tries to cover the core environmental factors that can deal with environmental stress, such as income (Y), urbanization (UB), natural resources consumption (NRs), renewable energy (RE), information & communication technology (ICT) and circular economy (EC) in top 28 waste re-cycled economies (WRE) throughout 2000–2021. Such data has been collected from different sources, such as the World Bank Open Bank, World Inequality Database, and Eurostat Open Data. Both data sources and their links are given below in Table 3. Besides, the data was strongly balanced, so this study does not feel any need to treat such data. Data sources, units, and measurements can further explain the environmental indicators discussed (see Table 2).

Table 2 Data description.

Significance of the study

Most nations have faced several challenges, and the energy shortage cannot be excluded from this race. With a significant rise in urban population, economies are looking for low-cost energy sources that can fulfil the rising energy demand. It is necessary to reshape energy-related policies and work together to reach an optimum sustainable energy level. UN has urged all economies to maximize renewable energy use and promote sustainability as human & economic activities are closely linked to the energy sector. Recently, it has been observed that most economies have faced energy challenges in urban areas and tried well to make energy transition via clean & affordable energy ¹⁰⁴. By having renewable energy as a last resort for the decline in carbon footprint, this study attempts to contribute by answering whether green energy in urban areas has a significant role in sustainability. In addition, the association between urban energy and environmental stress has not been well described. Urban areas have faced several environmental challenges due to unplanned waste management, and a few economies across the globe have tried to introduce the best utilization of waste for energy generation. It’s a common belief that renewable energy could be the best solution to urban environmental problems. From this initiative, every economy can attain two advantages: less environmental harm & maximum domestic energy supply. The circular economy’s mediating role on urbanization is evaluated for its support for long-term environmental sustainability. It would be a bridge to deal with urban-energy problems and try to disclose the hidden role of renewable energy & circular economy on environmental quality. It may also guide the crucial role of both factors in urban areas and their spillover effect on environmental sustainability. The study believes that policy analysts and practitioners would attain the perfect knowledge to reshape their green urban policies from this theme.

Pollution reduction aims could contribute to the broader field of circular economy, energy transition, and resource management. In the case of circular economy, this study would try to compel all stakeholders to minimize the wastage of output via innovative methods, which may help to improve the material recovery & reuse process. Such guidance may further help in a green environment and reduce carbon footprint over time. Also, sustainability aims may foster the performance of CE, which indirectly supports economic opportunities, innovations, production set-up, and green business models. Conversely, the CFP reduction aim may help to make energy transition in selected nations via efficiency, conservation, and equity. Such a transition from non-green to green would help to encourage various economic aspects: job creation, low-cost output, and a competitive market. Sustainability in terms of CFP reduction significantly impacts reshaping NRs strategies and ensuring sustainability, shortly. There are four different aspects where specified economies can sustainably manage NRs extraction. Firstly, the sustainability theme encourages the interdependence of sources to strengthen natural resource management. Secondly, massive renewable resources, such as investing NRs revenue in solar, wind, and hydro resources, should be ensured to diminish the overdependence on non-renewable energy sources. Thirdly, it may help to promote sustainable agricultural practices to ensure food supply. Finally, efficient utilization of natural resource wastage is noticeable, and the CFP reduction aim helps promote the NRs conservation.

Selection of economies

It is essential to describe the rationale behind region selection here. Waste-recycled economies (WRE) have been selected for three crucial reasons. Firstly, nations across the globe are facing severe environmental challenges, and rising pollution is one of them. So, the globe has compelled all nations to become carbon neutral by 2050. The selected nations from the carbon neutrality race cannot be excluded because these are being considered as a leading example in fighting for environmental sustainability. Secondly, the WRE has paid significant attention to maximizing renewable energy use under the Paris Agreement. Hence, the selected nations are working on the following points to maximize the renewable energy share. (1) The specified nations have encouraged the labor market via job opportunities in garbage collection, loading, and utilization in an efficient way to generate energy for domestic use. (2) In the case of solar systems, after the life-end, solar plates convert into valuable material to reduce overall wastage. Also, the wind energy system and its waste use in productive activities cannot be excluded from the race of such green initiatives. The selected nations have utilized advanced technologies to deal with wind waste. (3) Under the renewable supply chain, the leading aim of selected nations is to maximize socio-economic and environmental sustainability. (4) Government and policymakers have also compelled all stockholders to maximize green energy share in economic activities along with strict environmental regulations. Such actions encourage renewable energy and diminish the level of waste materials. (5) Policymakers have compelled higher authorities to offer interesting dreams to the private sector and promote the public–private partnership. Thirdly, these nations have tried to utilize available resources efficiently, but there is still a need for improvement. For that, these nations have introduced several green initiatives to manage natural resource consumption as per environmental standards. (1) The WRE nations first work on conserving natural resources by minimizing waste generation and maximizing recycling efforts. (2) To discourage natural resource depletion, specified nations have tried utilizing available resources in such products, which may be reused over time. These nations promote green waste separation & recycling methods to encourage the recycling rates and the deposit system of non-dissolved waste such as plastic bottles and cans. Figure 2 shows the carbo footprint map for the waste-recycled economies.

Fig. 2

Carbon footprint map for selected economies.

Finally, this theme has tried to cover some SDG targets to deal with environmental issues and should clarify its goals and specific targets for clear understanding. Under the “Sustainable Development Goals (SDGs),” specified regions have made significant efforts to overcome socio-economic and environmental issues, which are considerable. Firstly, this study considers economic growth per capita as an environmental factor associated with Goal 8 (Target 8.1: sustain per capita growth). Secondly, under the social factor, urbanization is considered to hit SDG 11 (Target 11.1: safe & affordable housing access in the urban sector). Such inclusion would help to understand the current situation of the urban sector and its key role in climate change (Goal 13). Thirdly, this empirical study focuses on the green role of information & communication technology (ICT), connected with SDG 9 (Target 9. C: ensure access to digital services). In the current era of development, natural resource extraction has become a top priority in support of growth activities, but it may change the environmental quality. Consequently, this study tries to relate it to SDGs, particularly SDG12. Under SDG 12, the present work focuses on Target 12.2 because it compels all economies to ensure the sustainable use of available natural resources. The core role of the circular economy is also being considered, and it is directly connected with SDG 12 (Target 12.5: reduce wastage through recycling to minimize environmental stress). Finally, under the Paris Agreement, overall economies have tried to shift their energy pattern and ensure the energy transition. The Waste-recycled economies cannot be omitted from this debate, and this study considers SDG 7 (Target 7.1: ensure affordable & clean energy) because specified economies are performing well in managing the environmental challenges. Figure 3 describes the selected SDG and their specified targets for a quick review.

Fig. 3

Selection of SDGs.

Empirical background and model construction

In order to understand the role of population growth on environmental sustainability (Ehrlich and Holdren (1971) introduced the IPAT model. They have described income as a function of population (P), affluence (A), and technology (T). Lately, the transformation was made in the IPAT model by Dietz and Rosa (1994), and it is well-known as the Kaya Equation, which describes calculation, projection, and different scenarios ¹⁰⁵. More recently, authors have felt flaws regarding some important environmental factors that must be included in the IPAT model. Thus¹⁰⁶, introduced a proper model to include the technology-related variable in the environmental equation, and later on, this model, known as the STIRPAT model, which is expressed as,

$${I}_{i}=a{P}_{i}^{b}{A}_{i}^{c}{T}_{i}^{d}{e}_{i}$$

(1)

Equation (1) describes the specified economies’ environment, population, affluences, and technology. However, b, c, and d can be written into α-series. Taking a natural log can transform this model into a log–log model.

$${\text{lnI}}_{i,t} = {\alpha }_{0} + {\alpha }_{1} {lnP}_{i,t} + {\alpha }_{2} {lnA}_{i,t} + {\alpha }_{1} {lnT}_{i,t} + {\mu }_{t}$$

(2)

$lnI$, $lnP$, $lnA$, and $lnT$ refer to the natural log of environment, population, affluence, and technology. $i$ refers to the number of cross-sectional, and $t$ refers to the study span. Dietz and Rosa (1994) suggest that technology can be extended to other environmental factors. Here, the present study uses the extended form of the STIRPAT model by including natural resources, circular economy, and renewable energy consumption, and the extended model can be written as,

$${\text{lnCFP}}_{i,t} = {\alpha }_{0} + {\alpha }_{1} {lnY}_{i,t} + {\alpha }_{2} {lnUB}_{i,t}+ {\alpha }_{3} {lnICT}_{i,t} + {\alpha }_{4} {lnRE}_{i,t} + {\alpha }_{5} {lnCE}_{i,t} + {\alpha }_{6} {lnNRs}_{i,t}+ {\mu }_{t}$$

(3)

As per the given extended form of model, $lnCFP$, $lnY$, $lnUB$, $lnICT$, $lnRE$, $lnCE$, and $lnNRs$ describe the natural log of carbon footprint, income per capita, urbanization, information and communication technology, renewable energy, circular economy, and natural resources for the selected economies. The current study also proposes some key hypotheses. Firstly, the populace tries to consume their income share on energy-intensive products that utilize massive energy shares and emit emissions; ultimately, its slope would be positive (${\alpha }_{1}$ > 0). Urbanization rate also becomes a significant factor, which utilizes available resources and brings pollution (${\alpha }_{2}$ > 0). The rapid development plans regarding social and economic activities also cause natural resource depletion and massive environmental stress. The rise in natural resource extraction at the domestic level may bring biodiversity losses (${\alpha }_{3}$ > 0). Having such issues, the current theme also considers some key solutions introduced by the globe to overcome such environmental pressure in the long run. For example, industrialization and urbanization can lead to significant waste, which diminishes environmental quality. In recent years, most nations have adopted the circular as a green initiative to deal with environmental issues. Incorporating waste-to-energy generation can greatly mitigate environmental degradation (${\alpha }_{4}$ < 0). Green energy consumption has also risen in recent years and has caused environmental sustainability. Developed economies have contributed significantly to green energy projects and tried to maximize RE share in total energy consumption. Due to its supportive role towards the sustainability level, its slope would be harmful in the long run (${\alpha }_{5}$ < 0). Finally, to manage all human & economic activities efficiently, ICT works as a mediator and brings less environmental stress to the atmosphere (${\alpha }_{6}$ < 0).

Besides the main effect, the leading aim of this study is to investigate the mediating role of energy transition in the urbanized sector. Urbanization may cause an increase in environmental pressure, but there may be a chance if selected economies try to involve the maximum share of renewable energy in urban human activities that may bring a sustainable environment. As well this study imagines that intervention of renewable energy in urban activities would cause a decline in emissions, and its slope would be negative (${\alpha }_{6}$ < 0).

$${\text{lnCFP}}_{i,t} = {\alpha }_{0} + {\alpha }_{1} {lnY}_{i,t} + {\alpha }_{2} {lnUB}_{i,t}+ {\alpha }_{3} {lnICT}_{i,t} + {\alpha }_{4} {lnRE}_{i,t} + {\alpha }_{5} {lnCE}_{i,t} + {\alpha }_{6} {lnNRs}_{i,t} + {\alpha }_{7} {lnREB}_{i,t}+ {\mu }_{t}$$

(4)

In addition, $lnREB$ describes RE’s mediating role on urbanization. Due to rapid urban growth, economies face severe challenges regarding wastage and the causes of biodiversity loss. The current study tries to utilize the role of circular economy in the efficient allocation of waste to energy generation, and its mediating role would bring less emission at the domestic level. Its mediating role can be written as $lnCEB$.

$${\text{lnCFP}}_{i,t} = {\alpha }_{0} + {\alpha }_{1} {lnY}_{i,t} + {\alpha }_{2} {lnUB}_{i,t}+ {\alpha }_{3} {lnICT}_{i,t} + {\alpha }_{4} {lnRE}_{i,t} + {\alpha }_{5} {lnCE}_{i,t} + {\alpha }_{6} {lnNRs}_{i,t} + {\alpha }_{7} {lnCEB}_{i,t}+ {\mu }_{t}$$

(5)

Figure 4 describes the study’s conceptual framework, whereby a reader can understand the leading issues and solutions in specified economies.

Fig. 4

Conceptual framework of the study.

Data validation via initial screening

Table 3 describes the outcomes of “descriptive statistics” and found no significant difference between the mean & median values, denying an outlier in panel data.

Table 3 Descriptive statistics.

Table 4 describes the results of pairwise correlation and strongly validates the data purity and freedom from multicollinearity. As per the given outcomes, not even a single variable has more than 0.80 correlation value with the explained variable that rejects the multicollinearity hypothesis in the panel data. Also, Fig. 5 describes the box plots of the selected variables.

Table 4 Correlation analysis.

Fig. 5

Box-plots of the selected variables.

Estimation strategy

This empirical research uses the most reliable scheme for empirical estimators that would provide the most robust & unbiased outcomes. Besides having an initial screening regarding the selected variables, this study undergoes further data validation tests. Firstly, it is a common belief that due to trade activities, economies are interconnected, and there may be cross-sectional dependence in the panel data. To verify this delusion, the work utilizes the old and most recent CSD tests suggested by ^{107,108,109,110}. The traditional data integration tests under the CSD may provide biased or less robust outcomes; that being so, the present empirical research utilizes the advanced data integration tests: CADF & CIPS ¹¹¹. Since data integration tests cannot deal with structural breaks, this study uses a structural break unit root test ¹¹². The general form of data integration can be expressed as,

$$\Delta {x}_{it}={\varphi }_{i}{d}_{i}+{\vartheta }_{i}{x}_{i\left(t-1\right)}+{\delta }_{i}{\prime}{z}_{i\left(t-1\right)}+\sum_{j=1}^{n}{\partial }_{ij}\Delta {x}_{i\left(t-j\right)}+\sum_{j=0}^{n}{\varnothing }_{ij}\Delta {z}_{i\left(t-j\right)}+{\omega }_{it}$$

(6)

$$CIPS\left(P,Y\right)=t-bar={P}^{-1}\sum_{i=1}^{P}{t}_{i}\left(P,Y\right)$$

(7)

If the explained variable is integrated at the difference, we must use an advanced co-integration test that addresses cross-sectional dependencies (CSDs). Traditional co-integration tests may produce misleading results under CSDs, making it essential for this study to utilize the advanced co-integration test proposed by ¹¹³. The general form of specified test can be expressed under the mean group average and panel mean statistics,

$${P}_{T}=\beta /SE(\beta )$$

(8)

$${P}_{\beta }=T\left(\beta \right)$$

(9)

$${G}_{t}=1/M\sum_{i-1}^{m}{\beta }_{i}/SE({\beta }_{i})$$

(10)

$${G}_{a}=1/M\sum_{i-1}^{m}T{\beta }_{i}/{\beta }_{i}$$

(11)

The present work could be pivotal as it selects either the first or second-generation methodology. According to ^114,115, if advanced co-integration tests are not supported, the first-generation method, like the panel VAR estimator series, is most suitable for empirical estimation. Accordingly, this study employs a suitable estimator from the Panel VAR series. Before proceeding to further empirical analysis, it tests for co-integration among selected variables as recommended by ^116,117.

The panel data may face several other issues, such as endogeneity, heteroscedasticity, and unobserved shocks that may not be covered via traditional methods such as Ordinary Least Square. Here, the most appropriate series of estimators are suggested when the number of cross-sections exceeds the number of spans (N > T). This study also has N > T, so the GMM series is more appropriate for making robust outcomes. To find more robust & unbiased outcomes, this study uses the “Generalized Methods of Moments Quantile Regression (GMM-QR)” recently proposed by ¹¹⁸. This estimator addresses the individual effects of each distribution rather than dealing with a combination. It also aids in classifying the heterogeneous covariance of each environmental determinant and can handle endogenous explanatory variables and their individual effects. The mathematical notation of GMM-QR can be expressed as,

$${Y}_{it}={\alpha }_{i}+{{X}_{it}}{\prime}\beta +({\delta }_{i}+{{Z}_{it}}{\prime}\gamma ){U}_{it}$$

(12)

${X}_{i,t}$ refers to the identical and independent distribution. In order to satisfy moment conditions, this estimator shows strict homogeneity, which can be expressed as follows:

$${Q}_{Y}(\tau |{X}_{it})={\alpha }_{i}+{\delta }_{i}q(\tau ))+{X}_{it}{\prime}\beta +{Z}_{it}{\prime}\gamma q(\tau )$$

(13)

Interestingly, Fig. 6 designates the graphical presentation of estimation strategy.

Fig. 6

Estimation strategy.

Results and discussion

The current theme tries to introduce tests for cross-sectional dependence and find robust outcomes for the selected panel. As per the given outcomes, Table 5 describes the CSD test findings and validates our prior expectations.

Table 5 CSD tests.

This study tested for slope homogeneity and confirmed expectations regarding homogeneity (see Table 6).

Table 6 Slope of homogeneity test.

Under the CSD, it is commonly believed that the traditional integration tests may not perform well and provide biased information; thus, the present study utilizes the CADF & CIPS unit root tests to obtain the most reliable outcomes (see Table 7). The results indicate that ICT, NRs, and renewable energy are integrated at the same level, while carbon footprint, urbanization, income, and circular economy are integrated. Interestingly, this study tries to provide only those values, showing data integration properties of either stationary at level or 1^st difference. These findings do not account for structural breaks, which compel this study to use a structural break unit root test.

Table 7 CADF & CIPS unit root tests.

Table 8 describes the outcomes of the structural break data integration test and shows different structural breaks for selected variables.

Table 8 Structural break unit root test.

As per the results regarding data integration, this study performs a long-term co-integration test among the selected variables. The suggested outcomes by Westerlund do not support the null hypothesis of co-integration among selected variables (see Table 9). In such cases^114,115, have introduced the idea that empirical study can perform the traditional data co-integration approach to validate whether variables have co-integration. By having co-integration, empirical research can utilize the VAR, GMM, and quantile regression panels.

Table 9 Westerlund cointegration test.

Table 10 describes the results of Pedroni co-integration and exhibits strong long-term co-integration among the chosen indicators. Also, the Kao test response cannot be excluded from this race and supports the findings of the Pedroni tests.

Table 10 Pedroni cointegration test.

Long-term outcomes by quantile GMM estimator

Table 11 describes the key outcomes of the Panel Quantile GMM estimator, and a robust long-term association between the selected variables is found. As per data characteristics (number of cross sections > number of years), the present empirical research utilizes the panel quantile GMM estimator, and the obtained associations are robust. For instance, the income per capita describes the positive connection with the carbon footprint (CFP) at a 1% significance level across all quantiles. In general discussion, a significant rise in income would cause an increase in energy-intensive activities such as purchasing luxury items. Most nations are transitioning in the energy sector to maximize the usage of green energy. Excessive conventional energy utilization resources in human & economic activities bring environmental stress and contribute to the carbon footprint. The populace tries to consume their significant income share on leisure activities such as tourism and restaurants, which increases the burden on biodiversity. Industrial development due to a rise in income also brings negative externalities to the domestic level that depletes natural resources and causes health issues. Numerous recent studies have shown that positive income behavior is related to rising emission levels. As an illustration, ¹¹⁹ demonstrated the SSA economies study and found a significant rise in emission levels due to income. They claimed that income had raised energy-intensive human & economic activities, indirectly bringing environmental stress to the atmosphere. ¹²⁰ described the positive connection of income with ecological stress before the financial crises in Greece’s economy. It may be due to an extensive utilization of resources, which ultimately brings a carbon footprint. But emission levels declined during the financial crisis (2008–2013) due to economic retrenchment. A study on 152 economies ¹²¹ also claimed that only one indicator cannot work well in to fight for sustainability. ¹²² described a rising emission trend due to a significant increase in income level. In the specified era, the Indonesian economy mostly utilized traditional energy sources such as coal, fossil fuels, and crude oil, which brought carbon emissions to the domestic level. Also, ^97,123 summarized the positive association of income with environmental pollution in Pakistan’s economy due to the extensive use of traditional energy in daily activities.

Table 11 Outcomes by quantile GMM estimator.

Urbanization and its relevant activities have severely threatened global sustainability. In this study, it shows a positive connection with carbon footprint. Simply put, urbanization across the economies has become a rational phenomenon for development activities that may lead to environmental stress. In recent years, this phenomenon has been observed because of the attraction of basic facilities, i.e., jobs, education, and health facilities. In this process, urbanization depletes the natural resources for residential construction and infrastructure development, ultimately raising environmental pollution in the atmosphere. In urban areas, most people try to utilize their vehicles to move from one place to another, which ultimately causes emissions due to excessive energy use. Besides the general argument regarding this connection, it is also imperative to introduce the responses of different studies for comparative discussion. This outcome aligns with the findings of ¹²⁴, which show a positive share of urbanization and carbon emissions. They claimed that people mainly migrated from rural to urban areas and utilized energy resources that brought emissions to the domestic level. They also demonstrated that industrial activities resulting from urbanization brought massive environmental distortion and caused biodiversity loss. ¹²⁵ supports this study outcome based on theoretical background. Such outcomes support the Compact City Theory, which describes infrastructure development that may utilize the maximum share of traditional energy consumption and bring environmental stress. Urban development programs are also a leading cause of emissions, supported by ¹²⁶, who highlight the impact of construction activities on this stress.

The coefficient value of ICT indicates a negative relationship with the carbon footprint (CFP), implying that significant ICT change could reduce environmental stress in the specified economies. Since the last three decades, the digital market has facilitated humankind in every aspect of life, diminishing asymmetric information regarding the market situation. And having perfect information regarding the market situation and online activities has reduced most human activities. Such reduction would reduce the time, transaction, and travel costs, ultimately minimizing energy utilization, which causes emission reduction. Numerous case studies also support the findings of this outcome. For instance, ¹²⁷, the case study of SSA economies, describes the negative association of technology with emissions. Behind such relation, they demonstrated, a significant rise in ICT penetration at the domestic level increases human development and consequently spurs environmental sustainability. In the same way, ¹²⁸ investigated the specified connection for the ASEAN economies and found the inverse connection. He described that ASEAN economies have settled their development plans to maximize ICT utilization in support of efficient & clean technologies. Due to efficient technologies, ICT shows a supportive spillover effect on sustainability. ¹²⁹ also postulated the positive connection in Tunisia’s economy, contrasting with this study outcome due to insignificant behavior. Then ¹³⁰ describes the ICT response towards the sustainability level and explains a certain supportive behavior was due to the immense utilization of ICT in OECD economies. They also pointed out; it may reduce asymmetric information regarding market fluctuation that could lead to environmental sustainability.

Natural resource utilization also becomes a serious threat to environmental quality which causes biodiversity loss and significantly hurts human health. This study considers natural resources (NRs) as a core sustainability factor, and its coefficient shows a positive linkage with carbon footprint ^131,132. A possible reason could be the over-exploitation of natural resources, causing loss and ultimately increasing the carbon footprint. Most economies have tried transitioning from traditional setups to industrial ones, which deplete natural resources and cause environmental deterioration. Economies often pursue rapid domestic progress at the expense of excessive natural resource NRs extraction, indicating unsustainable usage ¹³³. Transitioning to sustainable management practices in the NRs’ extraction and consumption is necessary to reduce the domestic carbon footprint ¹³². Very recently, the same argument has been observed in different comparative discussion studies. This study outcome aligns with ¹³⁴ and refers to the significant role of natural resources in the economic progress of ASEAN economies but with massive environmental distortion. Government or policy analysts try to get involved in NRs protection and sustainable practices to escape this trap. ¹³⁵ describe the current situation of MENA economies in line with the study outcome. They claimed, the MENA economies are based on NRs’ abundance and international exports. As per the report by World Atlas, MENA economies have 45%, & 60% of gas and oil reserves, respectively. These extraction activities brought 8.7% of greenhouse gas emissions.

Due to the significant rise in environmental stress, economies have tried their best to make an energy transition, but they face numerous issues in boosting green energy projects. Before moving forward to discussion and arguments by previous studies, this study considers the core role of renewable energy consumption (REC) in environmental sustainability and finds a negative association. REC significantly supports the theme of environmental sustainability and becomes a prominent factor for selected economies. Over the past three decades, the world has focused on transitioning from non-green to green energy to preserve a clean environment for future generations. Additionally, a global effort aims to limit temperature rise to 2 $^\circ{\rm C} ,$ achievable through collaboration and promoting green products. To illustrate, the selected and the Kyoto Protocol economies have invested enough in green energy projects to keep the environment clean. Various case studies across the regions have investigated the role of REC in environmental sustainability and suggested green policies. As ³⁶ focuses on renewable energy on carbon emissions and claims that 15 renewable economies try their best to minimize environmental stress over time. This phenomenon was due to a significant rise in sustainable energy share in total energy consumption. This outcome was also verified by recent studies such as the study of MENA economies ²⁸ and South African economies ¹³⁶.

The circular economy has become a crucial strategy for promoting a green environment. Many economies face severe challenges from human waste, leading to biodiversity loss, encouraging some to adopt circular economy practices that reuse waste for energy generation. Significant changes in this area could reduce environmental pressure, making circular economy a top priority for policy analysts addressing climate change amid growing concerns over rapid environmental deterioration. Because different types of garbage cause greenhouse gas emissions in the long run. As per the EU’s suggestion, half of the greenhouse gases come from waste, and a circular economy is a last resort to resolve this issue. Economies have also made significant progress to re-utilize all types of waste via production & consumption activities. This not only helped save money but also reduced some burden of energy imports. This theme is also supported by recent studies, such as ¹³⁷, which describe the possible solution to a circular economy to fight for sustainability in the long run. ¹³⁸ significantly shows the importance of a circular economy in the animal husbandry sector that causes greenhouse gas emissions at the domestic level. Also, ¹³⁹ demonstrates the crucial role of a circular economy in the pig sector, significantly reducing environmental stress. Lastly, ¹⁴⁰ and ¹⁴¹ show the significant role of the circular economy in dealing with environmental stress.

Robustness check for systematic analysis

This study never believes in a single estimator and its outcomes regarding the variable association. Thus, Panel Quantile Regression was used to inspect the proposed study objectives (see Table 12). The outcomes by P-QR do not deviate from the prior estimated results by the Q-GMM estimator. Income shows a positive association, which increases emissions and is aligned with ⁴². Urbanization and NRs consumption also describe the significant contribution to carbon footprint, and these outcomes can be verified via recent studies ^27,57. Technological development significantly reduces daily movement activities from one place to another and brings a decline in emissions, which is appreciated behavior ¹⁴². The significant response of renewable energy and circular economy in environmental sustainability cannot be ignored, validated by prior studies ^38,143. The discussed outcomes can be observed across all quantiles in Table 12.

Table 12 Panel quantile regression.

The mediating analysis

Table 13 describes the outcomes of Q-GMM that run to investigate the mediating role of renewable energy and circular economy on urbanization. This subsection describes each mediating effect. As per the given outcomes, the mediating effect of renewable energy on urbanization shows a negative but insignificant association with carbon footprint. This insignificant association can be elaborated on several backgrounds. Firstly, the urbanized sector consists of different sectors, such as education, industrial, health, and construction, directly associated with the energy sector. To meet the desired energy thirst in each sector, economies rely on traditional energy sources, which not only bring the carbon footprint but also disturb the balance of payment. Providing sustainable energy to all sectors for their daily activities is not easy. The share of green energy in total energy consumption is minor; it significantly reduces emissions, but pollution from other energy sources offsets its long-term effect. Secondly, the equipment utilized in each sector has not been updated yet, and energy-intensive behavior may further offset the green role of renewable energy in urban areas. Energy investment programs demand massive funding, and financial sectors are performing well in facilitating humankind with financial services, but the allocation is not satisfactory. Financial resources prefer to create loans for green investment projects to maximize green energy consumption. These are the key hurdles that bring the insignificant role of renewable energy in urban areas. The circular economy mediates the impact of urbanization on environmental sustainability, addressing biodiversity loss, particularly in urban areas. As the urban population consumes more goods, waste generation increases, yet inadequate waste management contributes to higher greenhouse gas emissions. Then, the selected economies tried their best to utilize such massive amounts of garbage in energy generation to manage these issues. Including a circular economy in the urban sector properly utilizes the garbage generated by human beings and the industrial sector in energy generation. The current study uses the mediating role of the circular economy on urbanization and helps to attain a clean & green environment. In concluding remarks, the circular economy performs better than renewable energy inclusion in urban areas.

Table 13 The mediating effect analysis.

Figure 7 shows the graphical presentation of the overall study outcomes.

Fig. 7

Graphical presentation of overall study outcomes.

Validation of EKC & LCC hypothesis

This empirical research offers a comparative analysis for theoretical validation by using two different proxies: the carbon footprint (CFP) and load capacity factor (LCF). As per given outcomes, this study finds a positive & negative association with CFP (see Table 14). This connection describes an inverted U-shaped EKC-hypothesis for WRE economies. That means any significant change in income level would cause an increase in carbon footprint, but after its threshold level, it helps to decline ED. Initially, specified economies may try to consume their income resources on energy-intensive projects, indirectly promoting environmental stress. At a later stage, with a significant increase in income level, people demand green projects to help secure the present & future generations from environmental degradation. This outcome can be verified via the results of some recent studies [refers: ^{144,145,146,147}]. In addition, this study examines the association of the non-linear relationship with load capacity factors and finds interesting outcomes. The evaluated results describe a significant decline in environmental quality due to rising income levels. Under the income square, response to LCF significantly enhances the environmental quality in WRE economies. This connection can be explained well by some core reasons. In the initial stages, income may be consumed on necessities rather than technological advancements, which eventually promote dirty activities at the domestic level. Over time, most nations try to transform their entire structure when the industrial sector expands with the services sector. The obtained U-shaped LCC hypothesis can be verified via results of ^148,149,150. Figure 8 exhibits the graphical presentation of investigated outcomes.

Table 14 Validation of EKC & LCC hypothesis.

Fig. 8

Validation of EKC & LCC hypotheses.

Forecasting analysis

The current empirical study has done additional tests to demonstrate the future trend for described indicators. Under the panel VAR model, this study only focuses on the Impulse Response Function (IRF) and Variance Decomposition Analysis (VDA).

Variable shocks by IRF

Figure 9 describes the shocks of each variable towards the dependent one and summarizes the exciting outcomes. As per the given shock of income to carbon footprint, it shows a declining trend, but over time, it would cause a rise in environmental stress. The shock from urbanization to carbon footprint gradually declines over time and then becomes stagnant. Information & communication technology also describes the first positive trend but declines slowly over time, supporting the significant role of ICT in environmental sustainability. The shock of NRs to carbon footprint can also be seen from the given figure, which shows a gradual increase in carbon footprint level as NRs extraction increases. The circular economy and renewable energy gradually decrease and increase the level of CFP in the specified economies.

Fig. 9

Impulse response function.

Variance decomposition analysis (VDA)

As per the given outcomes of VDA, this study tries to predict the future contribution of selected environmental determinants to carbon footprint (see Table 15). Any change in income may deteriorate the environmental quality by 2.908% for the chosen nations within the next ten years. Urbanization contributes to environmental deterioration by 0.181% within the next decade. ICT is essential in reducing ecological pressure as its excessive energy utilization via different devices may bring a carbon footprint of 0.261% in waste re-utilization economies. Natural resource (NRs) extraction significantly enhances emissions, but it would contribute in the next ten years only by 0.024%. It could result from efficient natural resource allocation by higher authorities and proper management for specified sectors. Over time, economies have become rational with green choices, and a circular economy is one of them. A circular economy would contribute to environmental deterioration, and such a factor would cause a carbon footprint of 0.877%. Loading and transporting the wastage across the economies could also be possible. Finally, renewable energy consumption will contribute to CFP by 0.240% within the next ten years. In final remarks, a circular economy would contribute immensely to environmental deterioration besides income.

Table 15 Variance decomposition analysis.

Granger causality test

Table 16 describes the panel Granger causality test outcomes and finds the robust outcomes. As per the given outcomes, bi-directional causality existed between income and carbon footprint in the selected economies. The feedback hypothesis was found for urbanization and carbon footprint, with a two-way causal association between the circular economy and carbon footprint. The feedback hypothesis was also found for the renewable energy and carbon footprint, and natural resources (NRs) and ICT granger cause a carbon footprint in selected economies.

Table 16 Granger causality analysis.

Conclusion and policy recommendations

The current study aims to introduce the vital carbon footprint factors in waste reuse economies covering 2000–2022. Income, urbanization, natural resource consumption, renewable energy, circular economy, and digitalization for carbon footprint were considered under the STIRPAT model. A series of estimators was utilized to investigate the study’s objectives, including quantile GMM, panel quantile regression, and panel VAR model. The summarized outcomes, income, urbanization, and NRs spur the carbon footprint. On the other hand, digitalization, circular economy, and renewable energy significantly reduce carbon footprint. Due to the exciting behavior of CE and RE, the current study tries to consider their mediating effect on urbanization to understand a more precise theme regarding sustainable urbanization. The outcomes considered show the negative impact of the mediating role on urbanization but are only significant for the circular economy. It infers that renewable energy has not adequately emerged in urban areas to control environmental stress. The present theme also utilizes the panel VAR model to forecast each variable response toward carbon footprint for the next decade. Finally, the Granger causality analysis outcomes cannot be ignored for specified economies.

Policy recommendations

A rise in carbon footprint with a significant income rise describes shocking news for the specified economies. It suggests that policy analysts urge stakeholders to use green products in production to ensure the green utilization of available resources. If consumers become rational about green consumption, introducing green product behavior and its long-term spillover effect on humans is achievable. A significant rise in income may bring sustainability at the domestic level. The attraction for increased income is not the best alternative; specified nations must allocate their budget to green projects such as renewable energy. Urbanization has led to environmental stress in certain economies, highlighting the need for green strategies for sustainable urbanization. First, these countries should implement green public transport and transition households from traditional to modern energy sources for cleaner and more efficient systems. Importantly, offering green energy at subsidized rates can increase its share in total energy consumption. Many economies develop horizontally, leading to environmental stress and resource depletion. Hence, these economies must guide development planners in organizing communities in alignment with green standards, helping to reduce environmental stress.

As per surprising outcomes regarding technology towards environmental sustainability, there are a few recommendations. Firstly, the selected economies must try to invest more & more in the digital market to facilitate humans in every aspect, which would bring less emission via perfect information. Secondly, to further increase the penetration of ICT in human lives, the specified economies must try to invest in the R&D sector to expand their capabilities for a sustainable environment. It is a common belief that the rise in digitalization can secure the environment via the efficient allocation of available resources in industrial and core economy sectors at the domestic level. The concerned economies (waste re-utilizes economies) must focus on public–private partnerships to promote green investment in sectors that may raise the human capabilities to fight against rising emissions.

The role of natural resources in rapid growth is fascinating, but such rapid extraction causes environmental stress at the domestic level. The policy analysts must try to compel production & consumption to utilize extracted resources efficiently and secure the environmental quality. The development planning must be coherent with international or domestic environmental standards. Green energy utilization is highly recommended to curtail the NRs’ exploitation and overdependence on traditional energy use. Green energy consumption has become a priority of the economies, and its utilization also reduces long-term environmental stress. In the real world, the cost of green energy is greater than non-renewable energy consumption, and that’s why most economies utilize non-green energy in daily activities. Higher authorities must promote public–private partnerships at the domestic level to use green energy in daily life because only a single economic actor can perform well in managing all issues simultaneously. Energy utilization by industrial and other sectors cannot be excluded from this race, and it would be a green initiative if higher authorities compelled all sectors to revolutionize their production process by maximizing the green energy share. Specified economies can also increase the share of green energy domestically and across borders for mutual collaboration. Under its mediating role in the urban sector, it does not perform well in dealing with environmental issues, so it is necessary to maximize green energy share to offset its insignificant role in managing the carbon footprint.

The current study further suggests green implications to strengthen the circular economy’s sustainability role. Firstly, it would be imperative for economies to properly focus on energy generation from urbanization & industrial wastage to remain clean & green. Secondly, most municipal sectors may perform poorly in garbage collection and transportation, which would cause further environmental stress. If selected economies try to guide their municipal sector for sustainable collection and utilization, it may bring further improvement in environmental quality. Thirdly, higher authorities try to allocate some additional budget to R&D activities to introduce innovative methods in the waste re-utilization process; it may help increase the green energy share in total energy consumption and may perform well over the decades due to its imperative behavior. In contrast, the key mediating role of circular economy in the urbanized sector not only diminishes the carbon footprint level but also helps to meet the desired energy thirst.

Policy recommendations under the shadow of SDGs

Since the last decade, overall economies across the globe have tried to meet the SDGs to bring revolution. Most nations are trapped in challenges and have tried hard to minimize such issues under the SDGs. Under the studied outcomes, this research proposes green policies for each variable. For illustration, income positively contributes to environmental stress, and specified economies should pay attention to the efficient utilization of income resources. In such utilization, higher authorities should invest in modern industrial setups, i.e., technology, renewable energy projects, green transport, and innovative methods to protect the environment quality. It would be appreciated if selected nations tried to invest in income sources in the tourism sector to offer green services, which would help promote further income and protect the environment under the SDG targets. Urbanization has become a leading trend across the nations, bringing biodiversity losses. Accordingly, this study tries to suggest numerous policy implications for sustainable urbanization under the prism of SDGs. Firstly, the government should try to focus on green urban planning, which may encourage green activities at the domestic level. Secondly, higher authorities should compel development planners to construct green buildings and offer them at lower rent to promote sustainable urbanization. Thirdly, it is necessary to provide green transport in urban areas to maximize the green traveling from one place to another and reduce environmental pressure. Fourthly, it is crucial to focus on green infrastructure, which secures human beings from diseases and helps reduce emissions. Finally, financial institutes should try to create loans for green activities such as advanced technology adoption, green energy projects, and labor training programs. In the case of ICT, few policies may encourage overall growth activities at lower environmental stress. Firstly, higher authorities should focus on providing ICT services at lower intrinsic costs and ensure such facilities have been spread across all sectors. Secondly, policymakers should try to compel all stockholders to ensure efficient utilization of ICT services in transport, industrial, and services sectors to overcome human activities; consequently, it supports sustainability. Thirdly, it would be interesting if specified nations could try to offer opportunities concerning digital literacy to strengthen the capabilities of all people to utilize it efficiently and follow environmental standards. Finally, promoting sustainable practices in ICT is highly appreciated. Adopting ICT at the domestic level would indirectly promote various SDGs, particularly SDG 9, SDG 1, SDG 5, SDG 16, and SDG 12.

Natural resource consumption and its harms in unstable environmental conditions are dreadful. Under the SDGs, selected nations should focus on these points: encouraging stakeholder engagement, waste-recycled activities, encouraging public–private partnerships to protect natural resources, and stopping massive natural resource depletion. In the case of renewable promotion, higher authorities should try to focus on SDG 7 and follow instructions such as increasing investment, importing green technologies, which may be compatible with renewable resources, encouraging domestic investors to participate in green projects, proper check & balance with the help of artificial intelligence, and deal with expensive projects at the national level. Finally, the WRE under the SDGs should try to adopt the CE’s strategies in their national plans and focus on re-utilizing wastage resources to form durable & reparable products. It would be interesting if specified economies should try to promote collaboration at the national & international level, which indirectly encourages innovation, knowledge, and technology. Higher authorities should also try to invest in the education sector to understand the actual CE’s theme over the long term and guide how people can protect their environmental quality. It could be possible when higher authorities try to induce domestic financial institutes to offer green loans for waste-recycled activities. There is a need to encourage technical innovations and infrastructure development, which are compatible with circular economy strategies and encourage green energy generation at lower environmental costs.

There are a few limitations of the study. First, this research only worked for the energy-urban theme and ignored the role of energy in population structure, which could be a leading gap for future studies. Second, a circular economy is the best solution to deal with carbon footprint, but it would be imperative if forthcoming studies consider other green environment measures such as technical innovation, green energy subsidies, green technology, and hybrid vehicles in urban areas. Including such innovative determinants may bring some innovations to the energy-urban nexus and cause environmental sustainability in the long run. The present work did not consider governance factors such as political stability, corruption, and other factors that may significantly influence the environmental level. It is necessary to add some governance factors to check out the actual contribution to environmental quality in selected economies. The current theme also considers carbon footprint only as a measure of environmental sustainability; upcoming studies may consider the different measures of CO₂ emissions, ecological footprint, nitrogen peroxide, and Sulphur dioxide, which may provide different outcomes for this theme. Finally, other estimators can be used to determine the validity of this study’s outcomes.

Data availability

Data will be available on special request from the Corresponding author.