Investigating the Impact of Human Capital on Ecological Footprints: Insights from China and India

Existing literature primarily investigates the impact of human capital on economic growth, neglecting its impact on ecological footprints. This study addresses this gap by examining the impact of human capital on ecological footprints in China and India from 1980 to 2020. Using ARDL, VECM and diagnostic tests, findings reveal that a 1% increase in human capital reduces ecological footprints by −6.91% in China and −2.70% in India. Results validate the environmental Kuznets curve hypothesis and renewable energy’s stronger influence in China (1.94%) than in India (0.25%). Causality tests revealed that human capital Granger-causes ecological footprints, economic growth and renewable energy in both countries. Bidirectional relationships are found between human capital, economic growth and renewable energy in China, while India exhibits unidirectional causality. Variance decomposition results further support these findings. The CUSUM and CUSUM-square stability tests confirm the structural stability of the estimated models, ensuring robustness. The analysis identifies three transmission mechanisms through which human capital mitigates ecological footprints: the scale effect via enhanced growth, the technique effect through improved renewable energy adoption and the awareness effect by fostering pro-environmental behaviour. In light of these findings, the study advocates for context-specific policy responses: China should deepen the integration of human capital development with renewable energy strategies, while India must intensify investments in education, health and skills to unlock environmental and economic co-benefits. The study highlights the imperative for coherent, nation-tailored policy frameworks aligning human capital advancement with environmental sustainability objectives in these economies.