Renewable Energy Consumption and the Ecological Footprint in Denmark: Assessing the Influence of Financial Development and Agricultural Contribution

Abstract

The aim of this study is to empirically examine the relationship between renewable energy consumption and the ecological footprint (EF), using Denmark as a case study, based on data covering the period from 1990 to 2020. In examining this relationship, the roles of agricultural, forestry, and fisheries value-added; economic growth; and financial development are also explored. The analysis, conducted using fractional frequency Fourier approaches, considers the presence of structural breaks. The results reveal a negative relationship between renewable energy consumption and EF, while a positive relationship is found between agricultural, forestry, and fisheries value-added; economic growth; and financial development with the EF. According to the causality analysis, a unidirectional causality is detected from renewable energy consumption to the EF. These findings highlight the potential impact of renewable energy on EF and emphasize the importance of integrating green energy investments and renewable fuel usage into strategies aimed at reducing the EF.