Achieving Sustainable Development: Balancing Carbon Dioxide Emissions Reduction and Poverty Alleviation in Less Developed Countries

Abstract

Carbon dioxide emissions (CO₂) reduction and poverty have always been conflicting subjects regarding national policy implementation, particularly in less developed countries (LDCs). Based on energy consumption as a driving mechanism, this study investigates whether reducing CO₂ aggravates poverty in LDCs. To achieve this aim we analyze a 30-year panel data of 15 LDCs and deploy fixed-effects regression models. We used two-stage least square (2SLS) regressions to address endogeneity concerns. Our results suggest that (CO₂) emission has a negative relationship with poverty, which means reducing CO₂ emissions increases poverty in LDCs. Our results provide important implications for policymakers, showing that a green structural transformation implementation that highlights the balance between environmental protection and economic development would be recommended for LDCs.