The relationship between the three dimensions of sustainable development

Abstract: Sustainable development is a widely discussed concept, and it is needed because the world is facing a massive global challenge of climate change. Sustainable development is envisioned as an all-inclusive concept of three dimensions; environment, economy, and society. However, there are trade-offs between these three dimensions. Thereby, there is a need for an enhanced understanding of the relationship of the three dimensions for better policy implications. This paper aims to analyze the correlation between these dimensions using the human development index (HDI), economic complexity index (ECI), and ecological footprint per capita as a proxy for society, economy, and environment. The research uses pairwise linear regression analysis to measure the correlation between HDI, ECI, and EF per capita for 114 countries between 1995 to 2017. The results show that all of them are positively correlated, meaning that economic complexity (economy) supports human development (society). However, both increase the ecological footprint, which is deteriorating the environment. This paper also revises the environmental Kuznets (inverted-U) curve hypothesis to make it more capability-oriented and test it for ecological footprint as HDI changes as well as for ecological footprint as ECI changes through nonlinear regression analysis. The evidence does not support the existence of environmental Kuznets (inverted-U) curves for EF per capita and HDI; however, it does support its existence for EF per capita and ECI, but only for certain periods. The findings enrich the understanding of the relationship between economy, society, and environment, which is useful for better policy implementation and identifies potential future research areas.