Assessing the influence of forest ecosystems, sustainable growth and environmental degradation: a comparative analysis of developed and developing nations

Forests are recognized as atmospheric carbon dioxide sequestrers and play a potential role in efforts to mitigate global climate change. This research employs the Pool Mean Group Autoregressive Distribution Lag (PMG-ARDL) model to determine the relationship between CO2 emission, forest area, forest rent economic growth, and energy consumption within developed and developing countries. The econometric techniques notably reveal a positively significant relationship between the economic growth of developed and forest rent of developing countries, while energy consumption of both with CO2 emissions for the short term at a 1% and 5% level. The long-term positive relationship between CO2 emissions and energy consumption is observed in developed forest-based countries. The negative relationship of CO2 emissions for developed countries with forests is recorded, as well as the forest rent. The CO2 emission and economic growth are negative, while CO2 emission, forest area, and forest rent share a positive relationship under the developing forest-based countries. The error correction term of both sets of sample countries is negative (−0.420 and −0.236) and significant, which confirms that one or two periods are not enough for the speed of adjustment from short to long-run equilibrium. The fully-modified ordinary least squares is also authenticated with the results of the PMG-ARDL model, while conducting a robustness check. The developed countries should focus on increasing forest areas, and developing countries should be concerned with economic growth without adding more environmental burden. This would help to reduce the CO2 emissions and preserve the forest as a natural CO2 emission sequester. This research contributes to the disclosure of developed and developing countries that have a bulk of forests, maintenance of economic growth, and energy consumption priorities to achieve a better quality of environment for upcoming generations.