Toward environmental sustainability: how do urbanization, economic growth, and industrialization affect biocapacity in Brazil?

The South American country Brazil is one of the richest countries in terms of natural resources, representing 14 percent of the world's total biocapacity. However, the biocapacity (biosphere's ability to generate resources and sequester waste) per capita in Brazil has shown a massive decline over the last five decades, while economic growth and urbanization have rapidly increased for the same period. Brazil is one of the largest creditors of biocapacity to the world, and biocapacity loss in Brazil can lead to devastating environmental consequences. Therefore, this work empirically investigates the influence of urbanization, economic growth, and industrialization on biocapacity controlling human capital from 1961 to 2016 in Brazil. The Bayer and Hack cointegration test, the Autoregressive Distributed Lag (ARDL) technique, and Hacker and Hatemi-J (J Econ Stud 39:144-160, 2012) causality tests are employed. The findings unfolded a U-shaped relationship between economic growth and biocapacity, evidencing that economic growth reduces biocapacity, but after achieving a threshold level, it promotes biocapacity. Urbanization has a negative relationship with biocapacity per capita, indicating that urbanization is a significant driver of the biocapacity loss in Brazil. Further, urbanization and economic growth Granger cause biocapacity. Lastly, relevant policy implications are proposed to overcome the reduction in biocapacity.