Examining the Impact of Economic Growth Challenges on Green Environmental Performance: Insights for Sustainable Development

Abstract

An analysis of the complex, and intertwined, relationships between global economic development, and green environmental sustainability. With economic growth indicators (GDP, trade openness, foreign direct investment) as independent variables and green environmental performance (carbon emissions, renewable energy adoption, ecological footprint) as mediating and dependent constructs, the paper integrates existing literature within a systematic framework. A study of empirical evidence for 2020–2026 shows that unrestrained economic growth contributes to environmental destruction, whilst appropriately designed green transitions can promote inclusive and sustained development in the long term. The main problems identified include policy fragmentation, financing gaps, institutional weaknesses, and the technology gap between developed and developing nations. The paper concludes that embedding Environmental, Social and Governance (ESG) frameworks, circular economy principles and multilateral mechanisms for climate finance are necessary as the basis for aligning economic ambition with planetary boundaries. This article contributes to the literature examining sustainable development, environmental economics, and global governance with practical implications for policymakers, international organisations, and development financiers.