Lien Thi Hoa Do

This study investigates the impact of biomass energy consumption, agricultural value added, raw material productivity, and gross domestic product growth rate on Vietnam’s environmental quality within the framework of the load capacity curve hypothesis over the period from 1986 to 2021. The analysis employs ARDL estimation and Granger causality tests to examine correlations. The results proved that agricultural value added and biomass energy are critical long-term drivers of environmental quality in Vietnam. The long-term estimation results suggest that a 1% increase in biomass energy consumption contributes to a marginal increase of 0.82% in the load capacity factor. In addition, agricultural value added appears to have a significant diminishing effect on the load capacity factor in Vietnam (an increase of 1% in agriculture value added versus a reduction of the load capacity factor by 2.28%). The study unveils a bidirectional relationship between biomass energy consumption and load capacity factor. These findings suggest that in Vietnam, biomass energy consumption improves environmental quality. In turn, improved environmental quality will promote biomass energy consumption.