The interaction between energy transition, pollution, recycling, and ecological footprint: Lessons from European countries

This study examines how the energy transition, pollution, recycling, and ecological footprint interact across 24 EU countries. Using annual data from 1996 to 2022, we apply panel vector autoregression (PVAR), panel dynamic OLS (PDOLS), and panel fully modified OLS (PFMOLS) to identify dynamic linkages, long-run relationships, and causality. The energy transition is the primary driver of reductions in carbon emissions and the ecological footprint. Recycling effects are conditional: benefits are most significant when recycling systems are powered by renewable energy and supported by efficient infrastructure, but pressures can rise when recycling relies on fossil-based energy. Results also show feedback dynamics in which higher emissions increase ecological pressure, prompting regulatory and behavioral responses that can subsequently reduce emissions and ecological degradation. Bidirectional causality between recycling and the ecological footprint indicates that gains from a circular economy depend on the energy mix and operational efficiency. Expanding renewable energy is essential for EU sustainability and decarbonization and should be coordinated with circular-economy strategies. Policy priorities include accelerating the integration of renewables; electrifying and digitalizing recycling systems; strengthening market-based instruments (e.g., EU ETS and CBAM); and complementing production-based measures with consumption-based indicators. An integrated approach that supports innovation and behavioral change, while accounting for diverse transition stages across member states, is crucial for sustainable development and environmental resilience. • Energy transition reduces Europe's carbon emissions and ecological footprint. • Recycling benefits depend on energy sources and infrastructure efficiency. • Renewable energy deployment is vital for sustainability and decarbonization. • Policy strategies include boosting renewables, electrification, digitalization, and market-based instruments.