Harnessing growth for ecological sustainability through exploring the drivers of load capacity factor in G7 nations

This study investigates the determinants of ecological sustainability across G7 nations by analyzing the factors influencing the load capacity factor (LCF)—a comprehensive measure comparing biocapacity and ecological footprint. The uses the STIRPAT model as a basis of analysis, and the main results are found using a novel Cross-Sectionally Augmented Autoregressive Distributed Lag (CS-ARDL) model; the study explores both short-run and long-run dynamics between LCF and key macroeconomic indicators—economic growth (ECG), population (POP), structural change (STC), service sector development (SERV), green innovation (GI), and research and development expenditure (R&D). The empirical analysis reveals that population growth and structural change have positive but mixed effects; the service sector contributes positively in the short term but negatively in the long run. Green innovation significantly reduces environmental pressure over time, confirming its role as a key driver of sustainability. R&D, although insignificant in the baseline model, shows significant long-run effects in robustness checks. The error correction term is negative and highly significant, indicating rapid adjustment toward long-run equilibrium. Robustness checks using AMG, MG, and CCEMG estimators confirm the validity and consistency of most results. Findings highlight the complex interplay between economic and environmental variables, underscoring the need for green innovation, sustainable service sector models, and targeted R&D investment. However, the study underscores that merely increasing R&D funding is insufficient to address environmental challenges. Instead, fostering the service sector and promoting green innovation are essential for achieving long-run economic growth with sustainability in the G7 and other developed nations alike.