Achieving ecological sustainability requires clearer evidence on how financial development and human capital can offset the environmental pressure created by growth and resource use in the G20. Although prior studies have examined these drivers, much of the existing literature either relies on conventional panel models that do not adequately address cross-sectional dependence and heterogeneous slope effects across countries, or it provides mixed conclusions about whether finance and capability-building genuinely improve ecological outcomes. This study responds to that gap by investigating the long- and short-run linkages among ecological footprint, economic growth, financial development, human capital, and natural resource use in the G20 over 1990–2020, using cross-sectionally augmented ARDL (CS-ARDL) and Westerlund cointegration techniques that explicitly accommodate both cross-sectional dependence and slope heterogeneity. The results confirm cointegration among the variables and show that economic growth intensifies the ecological footprint, while financial development and human capital help reduce it. These findings contribute policy-relevant guidance by identifying which levers—particularly finance and human capital—can be strengthened to protect environmental quality in the G20 despite growth and resource pressures.
Athari et al. (Tue,) studied this question.