Unveiling the Determinants of Environmental Sustainability in 11 DAC Countries: Evidence from the Load Capacity Factor, Driscoll–Kraay Estimation, and Machine Learning
DOI:
https://doi.org/10.54938/ijemdss.2026.05.1.723Keywords:
Load Capacity Factor, Information and communication technology, Renewable energy consumption, Driscoll–Kraay estimator, Random Forest, DAC countriesAbstract
Achieving environmental sustainability alongside economic growth remains major policy problems for advanced economies. While existing literature has largely investigated carbon emissions or ecological footprint indicators, relatively few studies have assessed environmental sustainability though the load capacity factor (LCF). This study examines the relationships between information and communication technology (ICT), renewable energy consumption (REC), economic growth (lnGDP), industrial value added (lnIVA), trade openness (lnTO), and environmental sustainability across 11 selected DAC economies from 2000-2024. Before estimating the empirical interplay, the study conducts 2nd-generation panel diagnostic tests for CSD, slope heterogeneity, unit roots, and long-run cointegration. The Driscoll-Kraay estimator is then employed to account for CSD, serial correlation, and heteroscedasticity. In addition to the panel econometric analysis, Random Forest (RF), Decision Tree, Lasso, Ridge, and Linear regression models are used to investigate predictive performance and potential nonlinear relationships. The DK estimates indicate that all explanatory variables are positively associated with LCF, although the association of ICT and REC shows comparatively modest. Among the machine-learning The Random Forest model perform best, achieving R2 of 0.6356 and an RMSE of 0.4906. The results suggest that digital expansion and clean energy transitions, sustainable trade integration, and green industrialization should be accompanied by context-specific environmental sustainability to enhance long-run environmental quality.
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Copyright (c) 2025 Sheeba Zafar, Muhammad Umar Farooq, Fareeha Akhtar, Aqeel Ahmed
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