Healthcare expenditure, fertilizer consumption, and environmental sustainability in the Oceania Region

Abstract The Oceania region faces a critical challenge as intense, fertilizer-driven agricultural growth leads to significant environmental degradation and public health issues, creating complex trade-offs and negative externalities. This study aims to examine the relationship between fertilizer consumption, healthcare expenditure, and environmental sustainability across seven countries in the Oceania region. The panel-based cross-sectionally augmented autoregressive distributed lag (CS-ARDL) and Dumitrescu-Hurlin causality methods are employed to analyze both long-run and short-run relationships among the variables from 1990 to 2024. Additionally, the Pedroni co-integration test and impulse response function were utilized to evaluate the cross-section-specific impacts and responses of the independent variables to the applied shock. The findings confirm that agricultural GDP, $${\text{CH}}_{4}$$ <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML"> <mml:msub> <mml:mtext>CH</mml:mtext> <mml:mn>4</mml:mn> </mml:msub> </mml:math> and $${\text{CO}}_{2}$$ <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML"> <mml:msub> <mml:mtext>CO</mml:mtext> <mml:mn>2</mml:mn> </mml:msub> </mml:math> emissions, and healthcare expenditure demonstrate long-run co-integrating relationship with chemical fertilizer consumption. The error correction term indicates that approximately 35.9% of the disequilibrium is corrected in each period. Short-run causality results further confirm that fertilizer consumption has uni-and bi-directional causal influences on healthcare expenditure, agricultural GDP, and environmental degradation among Oceania countries. Two-stage robustness test results strongly support the notion that chemical fertilizer consumption has significant negative impacts on environmental sustainability and healthcare expenditure in the region. Moreover, panel cross-section specific results suggest that the Oceania region should exercise caution regarding fertilizer consumption. Therefore, policymakers must implement strategies that encourage the use of green and organic fertilizers, controlled use of chemical fertilizers, and climate-smart agriculture technologies to address Sustainable Development Goals (SDGs) 3, 12, and 13 in the Oceania region.