The Nexus Between Sustainability Uncertainty and Ecological Footprint: Evidence from G7 Countries Using Second-Generation Panel Data Methods

In recent sustainability discussions, the link between policy uncertainty and environmental consequences has received significant attention. This study investigates the impact of sustainability uncertainty on the ecological footprint (EF) in G7 countries between 2002 and 2024. The recently developed ESG-Based Sustainability Uncertainty Index (ESGUI) is used as the primary explanatory variable. The control variables are economic growth, trade openness, and renewable energy consumption. Two complementary estimators capable of addressing cross-sectional dependence, slope heterogeneity, and degrees of mixed integration are applied: CS-ARDL and the AMG estimator. The CS-ARDL results demonstrate that the ESGUI and renewable energy have a weakly significant negative long-term effect on the EF, a result that reverses the positive raw correlation observed in the descriptive statistics, which is driven by the confounding effect of GDP. Moreover, economic growth has a strong positive effect on the EF. Nevertheless, the AMG estimator reveals that the ESGUI is negative but not statistically significant. Furthermore, economic growth contributes to environmental degradation by increasing the EF, while renewable energy and trade openness have a mitigating effect on this EF. Taken together, these results demonstrate that sustainability uncertainty plays only a limited role on average, while economic growth remains the dominant driver of EF. Consequently, policy efforts should focus on decoupling economic growth from resource use, strengthening carbon border regulation mechanisms, and prioritizing fossil fuel substitution rather than simply expanding renewable energy supply.