Environmental health in BIMSTEC: the roles of forestry, urbanization, and financial access using LCC theory, DKSE, and quantile regression

In recent years, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) region has faced pressing environmental concern, containing deforestation, pollution, biodiversity depletion, and increasing vulnerability to environmental change. Since many member countries depend highly on the Bay of Bengal's ecosystem for livelihoods and economic activities, addressing such environmental challenges is crucial for sustainable development. This research examines the impacts of forestry, urbanization, and financial inclusion on the load capacity factor (LCF) in the period of 2000–2022. The study seeks to understand the factors influencing regional LCF using econometric methods, such as cross-sectional dependence, slope homogeneity tests, and second-generation unit root and panel cointegration analyses. The Driscoll Kraay Standard Error (DKSE) method reveals a U-shaped connection between income and LCF, supporting hypothesis of Load Capacity Curve (LCC) in the BIMSTEC zone. The result indicates strong positive connections between forestry, urbanization, and LCF while highlighting the adverse effects of financial inclusion. Additional quantile regression (QR) analysis for validation confirms the steady U-shaped association between income and LCF across various quantiles. The result highlights the benefits of forestry and urbanization and the drawbacks of financial inclusion and population size. This study suggests promoting sustainable forestry, balanced urban development, cautious financial inclusion, and population management, providing insights for policymakers to develop strategies for resilience and prosperity in the BIMSTEC region.