Beyond the barrels: The impact of resource wealth on the energy-economy-climate targets in oil-rich economies.

This study models the Kaya identity equation for carbon dioxide (CO2) emissions in a panel of 20 oil-rich countries from 1994 to 2019. The estimators used are robust to cross-sectional dependence and allow for heterogeneous slope coefficients. The results indicate that natural resource extraction hinders environmental sustainability in oil-rich countries by altering the structural composition of their consumption mix towards energy- and carbon-intensive technologies. However, this relationship is only significant after reaching a turning point level of resource extraction. This suggests that the carbon curse is only triggered at higher levels of resource dependence, supporting a U-shaped relationship between natural resource extraction and CO2 emissions. The threshold for the natural rents to GDP ratio, beyond which natural resource extraction triggers the carbon curse, is found to be 12.18 %. The vulnerability assessment reveals that 17 countries in the panel, including Algeria, Kazakhstan, the United Arab Emirates, Iran, Iraq, Kuwait, Qatar, Oman, Saudi Arabia, the Congo Republic, and Libya, are already within the carbon curse zone. From a policy perspective, promoting sustainable development in oil-rich economies requires a shift towards renewable energy sources, reducing reliance on fossil fuels, and widespread adoption of energy efficiency and conservation mechanisms.

Natural resources, financial development and structural transformation in Sub-Saharan Africa.

Structural transformation is a crucial prerequisite for inclusive and sustainable development. In this context, this study examines the influence of natural resource dependence on the transformation of industrial structure in a panel of 30 Sub-Saharan (SSA) economies from 1995 to 2019, taking into account the role of financial development. The empirical analysis relies on the newly developed bias-corrected method-of-moments estimator. The findings indicate that natural resource dependence leads to a reduction in the output contribution of the manufacturing and service industries. On the other hand, financial development through the institutions channel decreases the output value of extractive industries while increasing the output value of manufacturing and service industries, resulting in a net positive effect on the evolution of industrial structure away from extractive-based industrialization. Considering the complex multidimensional nature of financial development, further findings suggest that the depth and efficiency of financial systems are critical areas for deepening structural diversification in the sub-region. Additionally, the findings reveal a U-shaped relationship between per capita GDP and industrial structure transformation. These findings highlight that natural resource dependence inhibits structural transformation in SSA and emphasize the importance of enhancing the depth and efficiency of financial systems as part of strategies to break the resource curse.

Testing the income-finance-trade-environment nexus based on the ecological load capacity factor: Frequency-domain causality evidence from Nigeria.

To ensure sustainable development, it is crucial that the consumption of ecological resources remains within their productive capacity. This study aims to support policy formulation by examining the nexus between income, financial development, trade openness, and the ecological load capacity factor in Nigeria from 1970 to 2021. The results of the Bayer-Hanck and autoregressive distributed lag (ARDL) bounds cointegration tests indicate a long-run equilibrium relationship among the variables. Parameter estimations were conducted using the dynamic ordinary least squares (DOLS) and ARDL model estimators. Both the long-run and short-run results indicate that the ecological load capacity factor has a U-shaped curve with income, thereby validating the load capacity curve hypothesis in Nigeria. The estimated threshold turning points of the curve fall within Nigeria's current range of per capita GDP, which indicates that further increases in income will enhance ecological sustainability. Additionally, the ecological load capacity factor exhibits a negative relationship with financial development and trade openness in the long run. The Breitung-Candelon spectral Granger causality tests reveal that, in the long run, unidirectional causality runs from income and trade openness to the ecological load capacity factor, and bidirectional causality exists in the case of financial development. Furthermore, the tests indicate that none of the causal paths are significant for wavelength periods below four years. Therefore, the study recommends implementing medium-to long-term policy strategies to strengthen the ecological resilience base of the economy.

Regulatory impediments to carbon emission mitigation in Sub-Saharan Africa: the impact of a hostile business environment and high tax burden.

Sub-Saharan Africa's regulatory environment ranks amongst the least business friendly in the world. The difficulty of starting and operating businesses and the high tax burden are amongst the major conditions that make the regulatory environment hostile. This study examines how these business regulatory conditions explain the growing challenges in mitigating CO2 emissions in the sub-region. For this purpose, data from 1997 to 2018 are used to analyse an extended environmental Kuznets curve (EKC) equation for thirty (30) Sub-Saharan African countries. The results of the Method of Moments Quantile Regression analysis show that the inverted U-shaped curve of the EKC hypothesis is statistically not valid across the entire quantile distributions. The impact of increasing tax burden on CO2 emissions is positive and increases across the entire quantile distributions. Business regulatory efficiency has a negative (i.e. decreasing) impact on CO2 emissions across the entire quantile distributions and shows a stronger impact in countries at the upper quantiles, such as in South Africa, Botswana, Gabon, and Nigeria. Conclusively, policy choices that seek to reduce tax burden on households and firms and foster greater economic freedom for businesses are needed to break the growing trend in Sub-Saharan Africa's CO2 emissions.

Accounting for the combined impacts of natural resources rent, income level, and energy consumption on environmental quality of G7 economies: a panel quantile regression approach.

As the argument widens on the need to cut down on global carbon emissions, this study addresses environmental degradation using a combination of second-generation empirical methodologies including, quantile regression (QR), augmented mean group (AMG), fully modified ordinal least square (FMOLS), and dynamic ordinal least square (DOLS) to examine the impacts of natural resource rents alongside disaggregated energy consumption on the environmental quality of the G7 economies within the framework of the stochastic impact by regression on population, affluence, and technology (STIRPAT) model. The empirical findings reveal that the total natural resources rent indicates a positive significant relationship with pollution in all the quantiles except Q 0.05. Additionally, the findings for renewable energy consumption are adverse and significant throughout the assessed quantiles while fossil fuel energy consumption is reported to have a positive and significant effect on carbon dioxide emissions, thus, increasing environmental degradation experienced in the G7 economies. The extended findings from the Granger causality analysis also show that income levels combined with fossil fuel use have a strong effect on environmental degradation, while the total natural resources rent granger causes clean energy consumption within the G7 countries. This finding supports the assertions that natural resource revenue is mostly channeled into further productivity avenues which consequently lead to further environmental degradation. As such, while maintaining targeted revenue agenda, we strongly recommend that productivity gains from natural resource rents within the G7 economies should be harnessed for investment in clean energy for a more sustainable environment.

Does bank credit to the private sector promote low-carbon development in Brazil? An extended STIRPAT analysis using dynamic ARDL simulations.

In support of the global efforts to tackle climate change, policy makers in the past decades have been actively involved, exploring possible options for ensuring low-carbon pattern of development. This study contributes to this important stream of policy discussion by using a newly developed econometric technique, dynamic ARDL simulations, to estimate and simulate the impact of bank credit to the private sector on aggregate carbon emissions and carbon emission intensity in Brazil over the period 1971-2014. The examined empirical model is based on a framework that incorporates the impact of population, economic growth, fossil energy intensity of consumption, and economic globalization. The analysis produced interesting results. First, the estimates show that economic growth and fossil energy intensity of consumption have significant long-run increasing impact on CO2 emissions in Brazil. Second, bank credit to the private sector has significant short-run and long-run reducing effects on aggregate CO2 emission and carbon emission intensity in the economy. Overall, the results reflect the tendency of the economy to become less carbon-intensive as bank credit supply to the private sector increases.

The impact of financial development on carbon, non-carbon, and total ecological footprint in Nigeria: new evidence from asymmetric dynamic analysis.

This study investigates the asymmetric dynamic effects of financial development on ecological footprint in Nigeria over the period 1971-2014 using the nonlinear autoregressive distributed lag (NARDL) framework. Ecological footprint in Nigeria is classified into carbon footprint, non-carbon footprint, and total ecological footprint. The results show that in Nigeria, a positive shock in financial development (an increase in financial development) has significant reducing effect on ecological footprint (i.e., improves environmental sustainability) while a negative shock in financial development (a decline in financial development) has significant increasing effect on ecological footprint (i.e., deteriorates environmental sustainability). Asymmetry test shows that a significant difference exists in how negative and positive shocks in financial development impact on carbon footprint and total ecological footprint, but not for non-carbon footprint. On the basis of the total ecological footprint, the adjustment asymmetry from the dynamic multiplier graph shows that the response of ecological footprint to a negative shock in financial development is stronger. Further findings from the analysis show that economic growth, energy consumption, urbanization, and economic globalization are all drivers of environmental sustainability in Nigeria. Overall, the results highlight the need for a deepened financial system, as part of the strategies for achieving sustainable development in Nigeria.