Assessing the impacts of formal and informal regulations on ecological footprint

Abstract This research applies the method of moments quantile regression (MQR) to probe the effects of formal (market and nonmarket) and informal environmental regulations (ERs education EDU and green technology TEC) on the six components of ecological footprint (EF). We investigate whether ERs are feasible tools for lessening environmental degradation by examining the ER‐induced environmental Kuznets curve (EKC) hypothesis. Results reveal that the nonmarket‐based ER‐induced EKC hypotheses are generally supported for carbon, fish, and forest footprints, signifying that when the three EFs reach a specific threshold level the nonmarket‐based ER saliently helps to move toward an environmental‐friendly condition. Nonmarket‐based ER and EDU are most efficient in reducing grazing land. However, we show that ER increases carbon footprint consumption, and ER is not completely effective to solve environmental degradation. Our analysis affirms the usage of MQR estimates, suggesting that the six types of EFs exhibit a nonlinearly response with ER across EF quantiles. Specifically, the U‐shape links are present in the forest‐EDU and graze‐NMKT nexus in the subsample of developing countries, implying that the EKC hypothesis is not valid for developing country. Therefore, government should encourage different ERs to reduce different types of environmental degradation.