The Role of Employment in Environmental Degradation: Empirical Insights from Selected G20 Countries

Abstract

Environmental degradation remains a major global issue, with significant implications for the environment and ecological sustainability. This study investigates the relationship between employment and environmental degradation in selected G20 countries, particularly focusing on the impacts of economic growth, renewable energy consumption and trade openness. The study examines long-term relationships using panel data from 1991 to 2021. This employs fully modified ordinary least squares, dynamic ordinary least squares and augmented mean group. The findings show that employment and GDP growth have a considerable impact on carbon footprints, confirming the environmental Kuznets curve hypothesis, which holds that economic growth increases environmental degradation before reducing it at higher income levels. Conversely, renewable energy has a significant adverse relationship with carbon emissions, emphasising its potential for decoupling economic expansion from environmental impact. However, trade openness has an association with higher carbon footprints, which supports the ‘pollution haven’ argument. The study emphasises the importance of integrated policies that balance economic development and environmental sustainability, providing actionable insights for achieving the UN Sustainable Development Goals and the Paris Agreement targets.

JEL Codes: Q56, Q43, C23, O44