Role of Income, Population, Electricity, and Energy Transition on Sustainable Environment: Evidence from Lebanon by Marginal Effect Analysis

This study empirically investigates the sustainable environment in Lebanon. In this context, the study uses ecological footprint (EFP) as the leading environmental proxy, while load capacity factor (LCF) is used for the robustness check. Also, the study considers some critical factors (namely, income, population, disaggregated level electricity consumption, and energy transition) as the explanatory variables, applies a marginal effect analysis through the Kernel-Based Least Squares (KRLS) approach, and uses data between 2000 and 2022. The empirical results show that (i) a 1% increase in income, population, hydroelectricity, and energy transition causes a 0.09%, 0.17%, 0.03%, and 0.80% increase in EFP, in order; (ii) fossil and renewable electricity consumption do not have a statistically significant effect; (iii) almost all variables considered have a varying marginal effect across percentiles; (iv) the KRLS results have a higher estimation capacity around 96.7%; (v) the empirical results are robust in case of alternative indicator (i.e., LCF) use. Thus, the study highlights the factors' marginal and percentile-based differentiating effects, while only hydroelectricity has a declining effect on environmental degradation. Considering the results, the study discusses policy options for Lebanon in ensuring a sustainable environment.