Abstract

As a region rich in natural resources and biodiversity, Latin America is particularly vulnerable to environmental crises. The ecological footprint (EF) of Latin America and the variables that affect it in the long run are examined through a panel data approach and causality, using a sample of 12 countries in the region over the period 1990 to 2014. The study uses human development instead of human capital, because the former considers health and standard of living in addition to schooling. Applying a recent methodology that contains tests and estimators for various specification problems including cross-sectional dependence, the study finds that economic growth and imports damage environmental quality while human development, renewable energy consumption and exports tend to mitigate the ecological footprint. Human development and imports have a unidirectional effect on the EF while there is feedback between economic growth, renewable energy consumption and the EF. Urbanization and financial development do not play a significant role, and the Environmental Kuznets Curve theory is not validated for the region. Policies are proposed for EF management to ensure sustainable development in Latin America.