The Impact of Nonlinear Fiscal Decentralization, Green Energy, and Policy Uncertainty on Sustainable Environment? A New Perspective From Ecological Footprint in Five OECD Countries


 The paper explores the short-run and long-run asymmetric impact of fiscal decentralization, green energy, and economic policy uncertainty on environmental sustainability proxied by ecological footprint. Using the Nonlinear Autoregressive Distributed lag (NARDL) approach in selected five OECD countries, we find that ecological footprint responds to positive and negative fiscal decentralization asymmetrically in the long run and short run. However, the nature of the response varies significantly across countries. The result also suggests that green energy is a major factor in reducing the ecological footprint in all countries except Canada. Finally, economic policy uncertainty plays a negative and significant role in the ecological footprint in the UK, US, and Germany while insignificant in Australia and Canada. Implications for effective environmental policies are discussed.


30
Since the World Earth Summit in Kyoto, Japan 1997, creating a sustainable environment 31 has become a significant world issue in the global context. The summit initiated the need to 32 protect our planet from the global environmental crisis. Approximately 80% of the world's 33 population lives in a country plagued by major ecological issues. Human living standards and 34 well-being have risen dramatically in recent decades because of significant economic expansion 35 and prosperity . This puts strain on the ecosystem, resulting in emissions,  Moreover, the ecological footprint is also regarded as a measure of environmental sustainability 88 (Destek & Sinha, 2020). 89 The core objective of this study is to empirically investigate the impact of green energy,   Fiscal decentralization is a practice in which regional or provincial governments are given 125 allocated authority or control over the regional economic activity (Hao et    The paper aims to empirically investigate the asymmetric imoact of fiscal decentralization on 195 ecological footprint. We exhibit the ecological footprint as a function of fiscal decentralization, 196 green energy, and economic policy uncertainty as given below: Where EFP is ecological footprint, FED is fiscal expenditure decentralization, GE is green or Mathematically: Where t shows each quarter of the selected data as subscripts and 0 … 3 are respective Wald test can be used to test the long-run symmetry in the model (  Finally, appropriate diagnostic tests are used to determine the reliability, stability, and 244 predictability of NARDL coefficients of the model. The Breusch -Godfrey LM test (Breusch,245 1978; Godfrey, 1978) was used to verify the residuals auto-correlation and serial correlation. 246 Ramsey's RESET test (Ramsey, 1969) was used to verify the normal distribution of the residual 247 terms and the appropriate functional form of the model. Auto-correlation and ARCH, i.e.,

320
As indicated in Table 4, the analysis empirically discusses these countries' long and short-run 321 dynamics one by one.

405
The short-run analysis depicts quite interesting output, as shown in Table 4. In Germany, the       Breusch-Godfrey LM test (Breusch, 1978;Godfrey, 1978) confirmed that the specified nonlinear

515
Uncertainty on Ecological Footprint. 516 The graphical presentation is given in Fig. 2, Fig. 3, Fig. 4, Fig. 5, and Fig. 6 shows the 517 cumulative effect of fiscal decentralization, green energy, and economic policy uncertainty on 518 ecological footprint for Australia, Canada, Germany, UK, and the USA, respectively by 519 determining the positive changes, negative changes and asymmetry in the data.

538
The main objective of this study is to empirically investigate the asymmetric or nonlinear autonomous bodies at local and provincial levels to monitor the institutional qualities to guard 574 environmental concerns can play an influential role in this regard. It is also suggested to 575 implement the carbon tax at the very root of provincial and local authority levels, which will play 576 an effective role like a two-way sword, which will not only surge government revenue thus will 577 prompt fiscal revenue decentralization and control environmental degradation, and upgrade 578 climate sustainability. Similarly, delegating more power to the provincial government to 579 manipulate the policies in favor of paradigm shift from extensive economic growth-oriented 580 models to low environmental degradation developmental models, especially low carbon 581 economic growth models to achieve sustainability concerning environmental perspective, will be 582 favorite.

583
The subsequent policy implication for these countries is to focus on a paradigm shift related to 584 energy portfolio by accumulating the share of green energy in the total sphere of energy 585 consumption. Similarly, proper planning for technological advancements and enhancements in 586 the power sector to enhance carbon capture and storage is the need of the hour to subdue 587 environmental degradation. Therefore it is indispensable to increase green investment to promote 588 environmental quality. Another suggestion is to devise different credit or green credit 589 mechanisms or systems to allow varying interest rates for industries depending on their parts into 590 environmental degradation and carbon emission. The more polluting industries may offer credit 591 at higher interest rates and vice versa, which will compel industries to innovate green or 592 renewable energy production at their potential level. Likewise, industries with low carbon 593 emissions should be given an incentive in the form of a low tax rate or tax exemptions. In 594 parallel, importers should be given subsidies to import green energy products. These suggestions