IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v14y2021i11p3104-d562631.html
   My bibliography  Save this article

Sustainable Investment—A Solution to Reduce Environmental Footprint

Author

Listed:
  • Kęstutis Biekša

    (Faculty of Social Sciences and Humanities, Klaipeda University, S. Neries Str. 5, LT-92227 Klaipeda, Lithuania)

  • Aurelija Zonienė

    (Faculty of Social Sciences and Humanities, Klaipeda University, S. Neries Str. 5, LT-92227 Klaipeda, Lithuania)

  • Violeta Valiulė

    (Faculty of Social Sciences and Humanities, Klaipeda University, S. Neries Str. 5, LT-92227 Klaipeda, Lithuania)

Abstract

The environmental footprint (EF) indicator has emerged as a tool to measure human demand for productive land and water and it is used for the evaluation of the impact of products or economic activities on the environment. There are many indicators that are used in the decision making for the investment in the power sector, however, predominant are the economic indicators which underestimate the depreciation of natural capital (environment) and the value added generated by the public services. Many research studies have been carried out in an attempt to demonstrate the versatility of the EF by extending its applicability not only to environmental assessment, but also to use it, among other economic indicators, when assessing sustainable investment. Sustainable investment (SI) combines fundamental analysis and engagement with an evaluation of environmental, social and corporate governance (ESG) factors. The purpose of this article is, upon evaluating the EF, to identify the opportunities for the EF reduction through sustainable investment in the electricity production sector in EU countries. Environmental footprint analysis has been performed by using sustainable process index program SPIonExcel (SPI), which is one of the methods in the EF family. SPI is a useful tool for assessing ecological problems and finding sustainable solutions in the life cycle of energy production process. This research has revealed that the function of the footprint reduction depends directly on investments in renewable energy source (RES) technologies, but not all investments can be sustainable. Countries mainly invest in the development of wind energy and solar PV technologies and gradually reduce their inland production capacities from fossil fuel. Although SI in RES technologies reduces the EF, this is not enough to reduce it substantially because there are limitations for installing new power capacities. Consequently, countries tend to invest in the development of electricity networks. The conclusion can be drawn as follows: the reduction of the EF of electricity could be achieved by developing RES technologies since the major part of electricity is produced by using non-renewable resources. It is essential to develop new technologies as soon as possible in order to reduce EF as much as possible, and this can only be achieved through systematic sustainable investment.

Suggested Citation

  • Kęstutis Biekša & Aurelija Zonienė & Violeta Valiulė, 2021. "Sustainable Investment—A Solution to Reduce Environmental Footprint," Energies, MDPI, vol. 14(11), pages 1-15, May.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:11:p:3104-:d:562631
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/14/11/3104/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/14/11/3104/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mathis Wackernagel & David Lin & Mikel Evans & Laurel Hanscom & Peter Raven, 2019. "Defying the Footprint Oracle: Implications of Country Resource Trends," Sustainability, MDPI, vol. 11(7), pages 1-21, April.
    2. Irina Kustova & Christian Egenhofer, 2019. "The EU Electricity Sector Will Need Reform, Again," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 54(6), pages 332-338, November.
    3. Hongbo Liu & Hanho Kim, 2018. "Ecological Footprint, Foreign Direct Investment, and Gross Domestic Production: Evidence of Belt & Road Initiative Countries," Sustainability, MDPI, vol. 10(10), pages 1-28, September.
    4. Onat, Nevzat & Bayar, Haydar, 2010. "The sustainability indicators of power production systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 3108-3115, December.
    5. Fiala, Nathan, 2008. "Measuring sustainability: Why the ecological footprint is bad economics and bad environmental science," Ecological Economics, Elsevier, vol. 67(4), pages 519-525, November.
    6. Simona Ioana Ghita & Andreea Simona Saseanu & Rodica-Manuela Gogonea & Catalin-Emilian Huidumac-Petrescu, 2018. "Perspectives of Ecological Footprint in European Context under the Impact of Information Society and Sustainable Development," Sustainability, MDPI, vol. 10(9), pages 1-25, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. F. L. Byk & P. V. Ilyushin & L. S. Myshkina, 2022. "Forecast and Concept for the Transition to Distributed Generation in Russia," Studies on Russian Economic Development, Springer, vol. 33(4), pages 440-446, August.
    2. Adriana Florina Popa & Valentin Burca & Daniela Nicoleta Sahlian & Daniela Livia Trasca, 2022. "The Interaction Between Renewable Energy Consumption and the Institutional Framework from a Circular Economy-Based Perspective," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 24(61), pages 648-648, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marco Filippo Torchio & Umberto Lucia & Giulia Grisolia, 2020. "Economic and Human Features for Energy and Environmental Indicators: A Tool to Assess Countries’ Progress towards Sustainability," Sustainability, MDPI, vol. 12(22), pages 1-19, November.
    2. Umberto Lucia & Debora Fino & Giulia Grisolia, 2022. "A thermoeconomic indicator for the sustainable development with social considerations," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(2), pages 2022-2036, February.
    3. Umberto Lucia & Giulia Grisolia, 2021. "The Gouy-Stodola Theorem—From Irreversibility to Sustainability—The Thermodynamic Human Development Index," Sustainability, MDPI, vol. 13(7), pages 1-13, April.
    4. Blasi, E. & Passeri, N. & Franco, S. & Galli, A., 2016. "An ecological footprint approach to environmental–economic evaluation of farm results," Agricultural Systems, Elsevier, vol. 145(C), pages 76-82.
    5. Yung-Jaan Lee, 2022. "Hybrid Ecological Footprint of Taipei," Sustainability, MDPI, vol. 14(7), pages 1-16, April.
    6. L. Hay & A. H. B. Duffy & R. I. Whitfield, 2017. "The S‐Cycle Performance Matrix: Supporting Comprehensive Sustainability Performance Evaluation of Technical Systems," Systems Engineering, John Wiley & Sons, vol. 20(1), pages 45-70, January.
    7. Kęstutis Biekša & Violeta Valiulė & Ligita Šimanskienė & Raffaele Silvestri, 2022. "Assessment of Sustainable Economic Development in the EU Countries with Reference to the SDGs and Environmental Footprint Indices," Sustainability, MDPI, vol. 14(18), pages 1-18, September.
    8. Sohail Abbas & Shazia Kousar & Amber Pervaiz, 2021. "Effects of energy consumption and ecological footprint on CO2 emissions: an empirical evidence from Pakistan," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(9), pages 13364-13381, September.
    9. Teixidó Figueras, Jordi & Duro Moreno, Juan Antonio, 2012. "Ecological Footprint Inequality: A methodological review and some results," Working Papers 2072/203168, Universitat Rovira i Virgili, Department of Economics.
    10. Mostafa Shaaban & Jürgen Scheffran & Jürgen Böhner & Mohamed S. Elsobki, 2018. "Sustainability Assessment of Electricity Generation Technologies in Egypt Using Multi-Criteria Decision Analysis," Energies, MDPI, vol. 11(5), pages 1-25, May.
    11. Gabriele, Alberto, 2010. "The Exaggerate Socialism Of Raul’s Cuba," MPRA Paper 26359, University Library of Munich, Germany.
    12. Hongbo Liu & Shuanglu Liang, 2019. "The Nexus between Energy Consumption, Biodiversity, and Economic Growth in Lancang-Mekong Cooperation (LMC): Evidence from Cointegration and Granger Causality Tests," IJERPH, MDPI, vol. 16(18), pages 1-15, September.
    13. Mehmet Ünal & Fatma Ünal, 2022. "Ecological Footprint Reduction Behaviors of Individuals in Turkey in the Context of Ecological Sustainability," Sustainability, MDPI, vol. 15(1), pages 1-19, December.
    14. Mduduzi Biyase & Tajul Ariffin Masron & Talent Zwane & Thomas Bilaliib Udimal & Frederich Kirsten, 2023. "Ecological Footprint and Population Health Outcomes: Evidence from E7 Countries," Sustainability, MDPI, vol. 15(10), pages 1-18, May.
    15. Berjawi, A.E.H. & Walker, S.L. & Patsios, C. & Hosseini, S.H.R., 2021. "An evaluation framework for future integrated energy systems: A whole energy systems approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    16. Jin, Guangzhu & Huang, Zhenhui, 2023. "Asymmetric influence of China's outward FDI and exports on trade-adjusted resources footprint in belt and road node countries: Moderating role of governance," Resources Policy, Elsevier, vol. 82(C).
    17. Muntasir Murshed & Mohamed Elheddad & Rizwan Ahmed & Mohga Bassim & Ei Thuzar Than, 2022. "Foreign Direct Investments, Renewable Electricity Output, and Ecological Footprints: Do Financial Globalization Facilitate Renewable Energy Transition and Environmental Welfare in Bangladesh?," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 29(1), pages 33-78, March.
    18. Domenico Morrone & Rosamartina Schena & Danilo Conte & Candida Bussoli & Angeloantonio Russo, 2022. "Between saying and doing, in the end there is the cost of capital: Evidence from the energy sector," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 390-402, January.
    19. Goldrath, T. & Ayalon, O. & Shechter, M., 2015. "A combined sustainability index for electricity efficiency measures," Energy Policy, Elsevier, vol. 86(C), pages 574-584.
    20. Pierre DUPRAZ, 2015. "Antoine Missemer, Nicholas Georgescu-Roegen, pour une révolution bioéconomique," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 96(2), pages 377-382.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:14:y:2021:i:11:p:3104-:d:562631. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.