Eco-friendly or Earth-Fever? Deciphering the asymmetric nexus between geothermal energy and ecological footprint

Abstract

Geothermal energy is a renewable and environmentally friendly source of power that emits considerably fewer greenhouse gases than fossil fuels, thus aiding in climate change mitigation and natural resource preservation. While existing studies have commonly employed panel data approaches, they often neglect country-level heterogeneity and the asymmetric relationship between geothermal energy consumption and ecological footprint. This study examines how geothermal energy consumption asymmetrically influences ecological footprint across the top ten geothermal energy-consuming countries: The United States, Indonesia, the Philippines, Iceland, Kenya, Turkey, Mexico, Japan, New Zealand, and Italy. Earlier studies primarily relied on panel data methodologies, which often overlooked the unique characteristics and specificities of individual countries. In contrast, this study employs time-series analysis and the quantile-on-quantile methodology, allowing us to isolate country-specific effects at different quantiles of geothermal energy consumption and ecological footprint. This approach enables a more nuanced understanding of the asymmetric relationship between these variables, addressing the heterogeneity that panel data methods could not adequately reveal. The findings reveal that geothermal energy significantly improves environmental quality by reducing the ecological footprint in most selected economies. However, country-specific differences emerge across various quantiles of the variables. However, Kenya and Mexico exhibit mixed patterns: Geothermal energy initially raised ecological footprint at lower geothermal energy consumption levels but later reduced it at higher consumption levels. The results emphasize the importance of country-specific energy strategies and call for inclusive policy evaluations tailored to varying levels of geothermal energy consumption and ecological footprint.