A continental and global assessment of the role of energy consumption, total natural resource rent, and economic growth as determinants of carbon emissions

Abstract

To limit the effects of carbon emissions and realize the Sustainable Development Goals (SDGs), countries worldwide seek efficient energy usage, economic sustainability, and natural resource blessing. Studies at the continental level mostly neglected the differences between the continents, while this study explores the long-run effect of natural resource rents, economic development, and energy consumption on carbon emissions and their interactions across the global panel of 159 countries divided into six continents from 2000 to 2019. Recently proposed panel estimators, causality tests, variance decomposition, and impulse response techniques were adopted. Findings from the panel estimator revealed that economic development contributed to environmental sustainability. At the same time, energy consumption increases ecological pollution globally and on most continents. The interaction between economic development and energy consumption positively impacted ecological pollution. Natural resources' rent was found to promote environmental pollution in Asia. The causality test results were mixed across continents and globally. However, findings from the impulse response and variance decomposition confirmed that economic development and energy consumption counted higher variations of carbon emissions than natural resource rents within the 10-year forecast. This study provides a valuable baseline for formulating policies related to the economy-energy-resources‑carbon nexus.