Building a sustainable future: insights from the relationship between human capital and environmental sustainability in the framework of load capacity curve hypothesis

Environmental governance initiatives have underscored the urgent need to tackle ecological challenges and attain sustainable development goals (SDGs) since the 1970s. In particular, the significance of human capital (HC) for sustainable development (SD), presented as a “green prescription” for quality of life, has gained increasing prominence. Despite growing interest in the role of HC, empirical evidence linking HC to environmental quality (EQ) within the framework of the Load Capacity Curve (LCC) hypothesis remains limited, which motivates our study. To address this gap, this study examines the impact of HC on EQ in the framework of the LCC hypothesis which suggests a U–shaped relationship between economic growth (EG) and load capacity factor (LCF), controlling for the effects of renewable energy consumption (REC) and globalization. We focus on 9 countries with the highest levels of HC: Australia, Belgium, Denmark, Finland, Germany, Japan, South Korea, Sweden, and Switzerland, over the period 2000–2021, by employing the novel method of moment quantile regression (MMQR). The empirical results corroborate the legitimacy of the LCC hypothesis, which posits that EG adversely affects EQ in the first stages but improves it beyond a certain threshold. Furthermore, findings reveal that HC significantly enhances EQ, particularly at lower quantiles, while REC and globalization exert positive and statistically significant effects across all quantiles. These findings underline the crucial role of HC in achieving long-term environmental sustainability. The study offers policy implications for integrating HC development with environmental objectives, emphasizing the need for coordinated strategies that simultaneously strengthen education, health systems, and green growth initiatives.