Persistence in Sustainable Development in OECD Countries: An International Assessment for the Load Capacity Factor

This paper aims to investigate the persistence of the load capacity factor (LCF), a comprehensive indicator of sustainable development, defined as biocapacity (BC) divided by ecological footprint (EF). Our contribution is methodological. We use long-memory processes for LCF as an alternative to combining short-memory or unit root processes with structural breaks, as in the literature. We use data for 31 OECD (Organization for Economic Cooperation and Development) countries from 1961 to 2024. We investigate the nature of sustainable development shocks associated with the LCF. A persistent LCF suggests that shocks may have long-run effects, potentially influencing the time horizon considered in environmental and sustainable development policy decisions. We empirically motivate long memory in LCF time series by testing against a short-memory process with structural breaks. We use several semiparametric estimators of the degree of fractional integration parameter from the literature. These involve alternative specifications of the (i) local Whittle estimator, (ii) exact local Whittle estimator, and (iii) two-step exact local Whittle estimator. Our results suggest predominant evidence of long memory in load capacity time series for most OECD countries. We discuss these results in terms of country-specific characteristics and environmental policies. One implication is that long-term initiatives concerning BC and EF are needed to pursue sustainable development in OECD countries.