The Effect of Environmental Degradation on Self-reported Health: The Role of Renewable Energy Consumption


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Yıldırım Öcal J., Alpaslan B., Karakas-Aydinbakar A., Hibiki A.

25th International Conference on Environmental Economics, Policy and International Environmental Relations, Praha, Czech Republic, 23 - 24 November 2023

  • Publication Type: Conference Paper / Unpublished
  • City: Praha
  • Country: Czech Republic
  • TED University Affiliated: Yes

Abstract

There is a growing concern about environmental pollution and its effects on individuals’ wellbeing and health. Due to limited energy supply, increasing energy demand, and the increasing negative effects of environmental degradation, more and more attention has been paid to sustainable energy resources around the globe. Most of the studies analyze both the effects of renewable energy use and pollutants on health-related variables in specific regions. However, there is a paucity of research assessing the impact of renewable energy consumption on self-reported health. The aim of this study is to examine the impact of environmental degradation on self-reported health with a particular emphasis on the mediating role of renewable energy use.

This paper utilizes a unique dataset that links micro-level data with the country-level data. While the micro-level data is based on the latest country surveys from 6th (2010-2014) and 7th (2017-2022) Waves of the World Values Survey (WVS) database, the macro-level data is obtained from the World Development Indicators (WDI) database. Overall, the sample covers 86,745 individuals for 57 countries.

The two equations system employed in this paper is presented as follows:

 

(1)

 

(2)

where  denotes the ordinal variable of individual self-reported health anddenotes the variables of the environmental degradation, which are the logarithm ofper capita, the logarithm of , and the logarithm of , respectively. i and j denote the individual and country, respectively. ɛ indicates error terms. and are a k×1 vector of covariates.

The presence of unobserved variables that affect both of the dependent variables may lead to a correlation between the error terms of Equations (1) and (2), leading to endogeneity problems. In order to account for the possible endogeneity issues in the modelling, this paper utilizes the Conditional Mixed Process (CMP) model based on a general seemingly unrelated regression (SUR) in which dependent variables are considered independent from each other.

Our findings show that environmental degradation hinders self-reported health. The impact of  is larger than those of  and  because  is used to measure the aggregated impact of multiple pollutants. Health declines with age. As the level of income and education increases, people become healthier. Females are less healthy than males. Additionally, renewable energy consumption reduces environmental degradation, which in turn improves self-reported health. The correlation coefficient between the disturbances of the pairs of equations is statistically significant and negative, implying that single equation modelling may fail to capture the interdependencies of outcome variables.

This paper has important policy suggestions. First, the use of renewable energy sources reduces not only the risk of climate change but also the external costs of local pollution. In this regard, the diffusion of renewable energy is of great importance especially in developing countries with the serious health damage due to the local pollution. Second, the carbon pricing would play an important role in the introduction of renewable energy. Feed-in tariffs scheme and renewable portfolio standards can also promote renewable energy use.