The effect of productive capacity changes, income, and clean energy on ecological sustainability in China by novel KRLS approach

The adverse effects of climatic issues on ecological sustainability have been increasing. Within this context, ensuring a transformation in economic structure into eco-friendly ones has become important. Accordingly, the study investigates how productive capacity changes are marginally effective on ecological sustainability by focusing on the Chinese case, using ecological footprint as the main indicator and load capacity factor as the alternative indicator for robustness, considering productive capacity index (PCI) types as independent variables, controlling economic growth, nuclear energy, and renewable energy, and applying the Kernel-Based Least Squares (KRLS) approach on yearly data from 2000 to 2022. The outcomes reveal that (i) aggregated level PCI and PCI subtypes, except for PCI for institutions (PCI-IN) and private sector (PCI-PS), are inefficient in ensuring ecological sustainability; (ii) PCI-IN has a supporting effect on ecological sustainability, while PCI-PS has an increasing but insignificant effect; (iii) economic growth, as well as nuclear and renewable energy consumption, have a decreasing effect on ecological sustainability; (iv) the outcomes are robust; (v) the KRLS approach presents high prediction outcomes reaching 99.7%. Overall, the study demonstrates the marginal effects of PCI subtypes, where only PCI-IN significantly contributes to ecological sustainability. Accordingly, the study discusses policy implications, such as relying on specific PCI types (i.e., PCI-IN) and trying to make other PCI indicators (e.g., PCI-PS) efficient in supporting ecological sustainability further.