Analysis of the convergence of environmental sustainability and its main determinants : the case of the Americas (1990–2022)

Abstract

This paper studies the convergence of environmental sustainability and its main determinants in selected American countries. In addition, it studies the impact of economic activity, income inequality, trade openness, and innovative activity on the sustainability of these countries. Convergence tests such as unit root and club convergence are applied. Furthermore, cointegration and causality tests are used, and long-term parameters are estimated using methods robust for crosssectional dependence. The results show evidence of stochastic convergence with the univariate unit root tests in the five indicators (energy consumption, carbon dioxide emissions, ecological footprint, energy intensity, and load capacity factor) used, while with the panel data unit root tests only in four (carbon dioxide emissions, ecological footprint, energy intensity, and load capacity factor). There is no evidence of convergence towards a single club considering the complete sample, but there is evidence of convergence towards several clubs. The variables are integrated of order one and are cointegrated. Moreover, using robust estimators in the presence of cross-sectional dependence in long-term economic activity, income inequality, trade openness, and innovative activity deteriorate sustainability, while renewable energy improves it in these countries.