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Article
Publication date: 10 July 2023

George Hondroyiannis, Evangelia Papapetrou and Pinelopi Tsalaporta

The Organization for Economic Cooperation and Development (OECD) countries are facing unprecedented challenges related to climate change and population aging. The purpose of the…

Abstract

Purpose

The Organization for Economic Cooperation and Development (OECD) countries are facing unprecedented challenges related to climate change and population aging. The purpose of the analysis is to explore the relationship between population aging and environmental degradation, accounting for human capital, using a sample of 19 OECD countries over the period 1980–2019.

Design/methodology/approach

On the empirical methodology, the analysis uses panel estimators with heterogenous coefficients and an error structure that takes into consideration cross-country heterogeneity and cross-sectional dependence for a panel of 19 OECD countries over the period 1980–2019. To examine the relationship between population aging and environmental degradation, the authors employ two alternative measures of environmental degradation that is energy consumption and CO2 emissions in metric tons per capita. Concerning the regressors, the authors account for two alternative aging indicators, namely the elderly population and the old-age dependency ratios to confirm robustness.

Findings

The analysis provides evidence that population aging and human capital development (IHC) lead to lower energy consumption in the OECD sample. Overall, the growing number of elderly people in the OECD seems to act as a mitigating factor for energy consumption. The authors view these results as conveying the message that the evolution of population aging along with channeling government expenditures towards human capital enhancement are important drivers of curbing energy consumption and ensuring environmental sustainability. The authors' research is of great significance for environmental policymakers by illuminating the favorable energy consumption patterns that population aging brings to advanced economies.

Research limitations/implications

The main limitation of this study concerns data availability. Future research, and subject to greater data availability in the future, could dig deeper into understanding the dynamics of this complex nexus by incorporating additional control variables. Similarly, the authors focus on aggregate renewable energy consumption, and the authors do not explicitly model the sources of renewable energy (wind, hydropower, solar power, solid biofuels and other). Additional analysis of the breakdown of renewable energy sources would be insightful – subject to data availability – especially for meeting the recently agreed new target of 42.5% for European Union (EU) countries by 2030. A deep transformation of the European energy system is needed for the EU to meet the target. Finally, extending the model to include a range of non-OECD countries that are also experiencing demographic transformations is a promising avenue for future research.

Originality/value

To the best of the authors' knowledge, this study is the first to examine the effects of population aging and human capital on environmental degradation using a broad set of OECD countries and advanced spectrum estimation methods. Given cross-sectional dependencies and cross-country heterogeneity, the authors' empirical results underline the importance of cross-OECD policy spillovers and knowledge diffusions across the OECD countries. The new “energy culture” calls for concerted policy action even in an aging era.

Details

Journal of Economic Studies, vol. 51 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 14 February 2024

George Hondroyiannis, Eleni Sardianou, Vasilis Nikou, Kostas Evangelinos and Ioannis Nikolaou

The vast amounts of waste generated today threaten economies and societies due to high environmental and management costs. The aim is to investigate the short- and long-term…

Abstract

Purpose

The vast amounts of waste generated today threaten economies and societies due to high environmental and management costs. The aim is to investigate the short- and long-term patterns of municipal waste generation (MWG) in response to socio-economic and demographic growth variables at national and regional levels.

Design/methodology/approach

A panel data approach employing ordinary least squares (OLS), fixed effects (FE), random effects (RE), fully modified least squares (FMOLS) and error correction model (ECM) techniques. A sample of 28 European countries (2000–2020) and 44 European Union (EU) regions (2000–2018) were selected.

Findings

During periods of economic growth and higher employment rates, consumer confidence tends to increase, leading to elevated levels of consumer spending and consumption. Intensification in the production factors, specifically capital and employment, results in an upsurge in MWG, thereby creating a cycle where waste generation becomes deeply entrenched in the economic system in both the short and long terms. Rapid population growth, attributed to higher fertility rates, is associated with increased MWG. At the regional level, a double-aging process and a shift toward an aging population exert less pressure on MWG in both the short and long term. Promoting higher levels of environment-oriented human development yields various benefits, including the generation of greater knowledge spillovers, enhanced environmental literacy, a shift toward circular thinking and the promotion of greener entrepreneurship. Increased R&D expenditures facilitate the development of innovative waste reduction technologies, fostering improvements in waste management techniques, recycling processes and the utilization of sustainable materials.

Research limitations/implications

The research examines the short- and long-term adjustments of MWG in response to changes in macroeconomic variables from low aggregation (countries) to high aggregation (regions). By analyzing the relationship between economic growth, urbanization, healthcare system quality, labor market functioning, demographic trends, educational level, technological advancement and MWG, the study fills a research gap and enhances understanding of waste management interventions. However, data availability and waste statistics accuracy should be considered. Future research could explore the relationship between macroeconomic variables and waste generation in sectors beyond MWG, such as industrial or construction waste, for a more comprehensive understanding of waste generation as a whole.

Practical implications

The positive correlation between economic activity levels and waste generation in both the short and long terms, emphasizes the criticality of investing in waste reduction and recycling infrastructure to mitigate landfill waste. The negative correlation between population density and waste generation stresses the importance of strategic waste facility placement in low-density areas. To effectively manage higher MWG, tailored waste collection systems and initiatives promoting healthy lifestyles are of immense importance. The positive relationship between employment rates and waste generation underscores the necessity of waste reduction programs that generate employment opportunities. The positive correlation between fertility rates and waste generation emphasizes the need for the expansion of extended producer responsibility programs to include products and materials specifically associated with families and child-rearing. Education campaigns and governmental support for research and development (R&D) in waste reduction technologies are also integral components of an effective waste management strategy.

Originality/value

The short- and long-term adjustments of MWG reacts to shifts in macroeconomic variables from low aggregation (countries) to high aggregation (regions). Previous research has neglected the long-term information contained in variables by not incorporating the lagged error correction term (ETM). Neglecting this aspect could result in imprecise estimates of the elasticities.

Details

Management of Environmental Quality: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1477-7835

Keywords

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