Do geopolitical risks affect environmental degradation in Poland? New evidence from an autometrics-based framework

Environmental degradation is frequently cited as one of the eminent issues in the modern era. To limit environmental degradation, prior literature discerns several macroeconomic, socio-economic, and institutional factors that affect environmental degradation. However, the relationship between geopolitical risk and environmental degradation is understudied in the previous literature. To fill this gap, the inquiry at hand aims to scrutinize the influence of geopolitical risk on environmental degradation for E7 countries while controlling the effect of renewable energy, non-renewable energy, and GDP. Further, we utilize both the ecological footprint and CO2 emissions as proxies of environmental degradation and employ second-generation panel methods for robust findings. In addition to this, the present study uses augmented mean group (AMG) estimator to provide long-run relationship among the selected variables. The findings from the AMG estimator expound that there exists environmental Kuznets curve (EKC) for E7 countries. Moreover, renewable energy ameliorates environmental quality because it plunges both ecological footprint and CO2 emissions. On the contrary, non-renewable energy consumption escalates both ecological footprint and CO2 emissions. Finally, geopolitical risk tends to decrease CO2 emissions as well as ecological footprint. Our findings deduce a few policy implications to replenish environmental quality. For instance, the share of renewables in the energy mix should be surged to ameliorate the environmental quality. Further, to control both the geopolitical risk and environmental degradation at the same time, policymakers should put forward reforms and initiatives (e.g., policies to escalate R&D, technological innovations, and tax exemptions on imports of renewables) that can help to improve environmental quality without affecting geopolitical risk. At times of low geopolitical risk, environmental degradation will surge; therefore, the rate of environmental control taxes should be increased by the policymakers.

Sustainable development involves the incorporation of socio-economic concerns and environmental protection into the economic decision-making process, in such a way that, any developmental effort would eventually be favorable to immediate and future generations. It is against this backdrop this study investigates the effects of geopolitical risk and globalization on environmental degradation in South Africa over the period 1985Q1-2018Q4. This study improves on existing studies and raises concerns on the potential twin-effect of geopolitical risk and globalization on the environment. We deviate from the existing studies that make use of the mean causality approaches that do not consider possible dependence in the conditional tail of the series distribution. To examine whether the causality exists among the series, we make use of the novel Troster (2018) Granger non-causality in condition quantiles, which captures the pattern of causality in various quantiles. Empirical results show that there is feedback causality nexus between geopolitical risk and CO2 emissions. In majority of the quantiles, feedback causality is also observed between globalization and CO2 emissions. We find a bidirectional Granger causality nexus between geopolitical risk and environmental degradation, and between globalization and environmental degradation. Globalization and geopolitical risk negatively influence environmental degradation. We conclude that environmental degradation is not driven by globalization and geopolitical risk in South Africa, among other policy suggestions.

In this paper, we examine whether geopolitical risk influences environmental degradation, while controlling for non-renewable energy consumption, economic growth and trade openness, using a quarterly dataset from 1985Q1 to 2019Q4. The choice of India as a case study is based on a number of reasons. India is a developing country, which produces approximately 3.2% of global GDP. Also, India produces almost 17.7% of the world population. The country also emits about 6.8% of global carbon emissions, and according to the 2020 report of the consulting firm Eurasia, India is ranked fifth in terms of geopolitical risk. This study adds to the existing literature by using the quantile-on-quantile (QQR) regression to examine the effect of geopolitical risk on environmental degradation, as well as highlighting the implications of geopolitical risk on environmental sustainability. Based on empirical estimation, we find that geopolitical risk increases and decreases carbon emissions in India. That is, geopolitical risk increases environmental degradation at middle quantiles and decreases environmental degradation at lower and higher quantiles. In addition, we find that non-renewable energy consumption, economic growth and trade openness impede environmental quality in India. Thus, we are of the opinion that policymakers, when making policy decisions on environmental quality, should factor in geopolitical risk in two areas, mitigation and channel of escalation, among other policy suggestions.

The intersection of geopolitical instability and environmental degradation presents substantial challenges for sustainable development. While existing literature primarily focuses on the direct effects of geopolitical instability on environmental degradation, it often overlooks the mitigating potential of technological advancements and structural changes. This study explores the crucial roles of artificial intelligence (AI) and energy transition (ET) in diminishing the environmental impacts exacerbated by geopolitical risk (GPR). Using advanced econometric models, this research analyzes data from 33 countries to elucidate the complex dynamics involved. The findings show that (1) There is always a facilitating relationship between GPR and environmental degradation, and when the environmental degradation quantile is high, the facilitating relationship decreases with the increase of the quantile. (2) Both AI and the ET have negative moderating effects on the relationship between GPR and environmental degradation. (3) There is a single threshold effect for both AI and ET, and the effect of the GPR index on per capita ecological footprint (EF) turns from positive to negative as AI increases. When ET is the threshold variable, GPR has an effect on the EF only at higher levels of the ET, and it has a dampening effect. Targeted policy recommendations will be provided in response to these findings.

The varying impact of financial development on the environmental footprint due to geopolitical risk: The difference between high- and middle-income countries

Economic policy uncertainty (EPU) reduces energy consumption and the use of pollution intensive commodities, which not only relieves environmental degradation, but also hinders investment in renewable energy and R&D, and leading to environmental degradation. Geopolitical risks (GPRs) result in a sharp drop in economic growth and energy consumption, and hinder environmental degradation. In addition, they can bring about a decrease in R&D, innovation and renewable energy, and will further exacerbate environmental degradation. By using the monthly data from Jan. 2000 to Dec. 2017 of China, a five-variable time varying parameter stochastic volatility vector auto regression model (TVP-VAR) of EPU, GPRs, industrial added value growth rate, crude oil growth rate and ecological footprint (EFOOT) is established. According to the results of the model, the conclusions can be drawn as follows : (1) EFOOT has a positive feedback on EPU in short, medium and long term, marking the investment effect of EPU is greater than consumption effect. (2) EFOOT has a negative feedback on GPRs in short, medium and long term. (3) The utilization characterized by the growth rate of industrial added value and crude oil has a negative impact on EFOOT. It is worth noting with the steady improvement of China’s economy, the further improvement of economic strength and the high attention to environmental protection from 2015, the impact of EPU and GPRs on the EFOOT began to weaken.

This research investigates the effects of income, total energy consumption (TEC), energy price index (EPI), crude oil price (COP), political risk index (PRI), and geopolitical risk (GPR) on environmental degradation. In this context, the study includes five Gulf Cooperation Council (GCC) countries, which are mainly oil-rich and have high fossil fuel energy consumption with increasing environmental degradation; considers monthly data from 2000/1 to 2021/12, and deploys novel quantile-based methods. The outcomes demonstrate that (i) an increase in income, TEC, and EPI stimulates environmental degradation in all GCC countries; (ii) PRI, COP, and GPR have mixed effects on environmental degradation; (iii) a causal effect from the regressors to CO 2 emissions exists in all quantiles except for some middle (0.45–0.55) and higher quantiles (0.95); (iv) the power of effect and causal effect vary according to quantiles and countries; (v) the consistency of the results is validated based on robust model. The findings reveal that an increase in income, TEC, and EPI is generally harmful to the environment in the GCC countries; but, PRI, COP, and GPR have mixed effects. The results of novel quantile-based methods underline the significance of political stability and geopolitical risk effect as non-economic and non-energy factors on environment degradation by demonstrating quantile-based varying effects of the regressors on the environment in GCC countries. Accordingly, various policies, such as focusing on increasing political stability, benefitting from geopolitical risk as leverage, and enabling the transition to clean energy, are discussed.

Since the turn of twenty first century, economic policy uncertainty (EPU) and geopolitical risk (GPR) have escalated across the globe. These two factors have both economic and environmental impacts. However, there exists dearth of literature that expounds the impact of EPU and GPR on environmental degradation. This study, therefore, probes the impact of EPU and GPR on ecological footprint (proxy for environmental degradation) in selected emerging economies. Cross-sectional dependence test, slope heterogeneity test, Westerlund co-integration test, fully modified least ordinary least square estimator, dynamic OLS estimator, and augmented mean group estimator are employed to conduct the robust analyses. The findings reveal that EPU and non-renewable energy consumption escalate ecological footprint, whereas GPR and renewable energy plunge ecological footprint. In addition, findings from the causality test reveal both uni-directional and bi-directional causality between a few variables. Based on the findings, we deduce several policy implications to accomplish the sustainable development goals in emerging economies.

Interrelationship between environmental degradation, geopolitical risk, crude oil prices, and green bonds: Evidence from the globe by sectoral analysis

Environmental degradation (ED) and geopolitical risk (GPR) reduce life expectancy (LE) by worsening health through pollution and ecosystem damage, and by disrupting healthcare systems and basic services via conflicts, displacement, and food insecurity. Together, they create unstable living conditions that shorten lifespans. Thus, this study aims to investigate the impact of ED, GPR, institutional quality (IQ) and technological innovation (TI) on LE in BRIC economies from 1993 to 2022. This study employed the second-generation econometrics technique. We used Cross-sectional augmented distributed lag (CS-ARDL), fully modified ordinary least squares (FMOLS), and Dynamic ordinary least squares (DOLS) methods. The result shows that ED and GPR have negative effect on LE, while IQ, TI and GDP have positive effect on LE. These findings present enormous contributions, significant research implications to BRICS nations and development literature, and policy implications for LE of BRICS economies.

The dampening effect of geopolitical risk and economic policy uncertainty in the linkage between economic complexity and environmental degradation in the G-20

Purpose: The aim of this study is to point out the impact of geopolitical risk on climate change. The CO2 emissions per capita is used as a proxy for climate change. Methodology: In this study, the data sample covers annual data from 1990 to 2015 for 12 selected Latin American and Asian countries. After standard preliminary tests (Cross-sectional dependence tests, CIPS unit root test, and slope homogeneity test), we employ the second-generation estimator – the AMG (Augmented Mean Group) method to explore the long-run relationship between geopolitical risk and CO2 emissions per capita. Results: The AMG findings document that a 1% rise in geopolitical risk escalates CO2 emissions per capita by 0.001%. In addition, economic growth and fossil energy consumption foster CO2 emissions per capita, whereas renewable energy contributes to decreasing CO2 emissions per capita. Conclusion: In recent years, scholars have attempted to explore the impact of geopolitical risk on environmental degradation. According to our results, in Latin American and Asian countries, decreasing geopolitical risk and conflict can impede environmental degradation. In the long run, a robust clean energy policy should be considered in case of geopolitical conflict by the government. Besides, the government should focus on renewable energy policy and substitute non-renewable energy resources with more technology-intensive resources.

Geopolitical risk, economic uncertainty, and militarization: Significant agents of energy consumption and environmental quality

Purpose This study aims to investigate the impact of green finance (GF), green energy, green innovation (GI) and geopolitical risk (GPR) on India’s production-based and consumption-based CO2 emissions (PCO2 and CCO2) for 1990–2020. Design/methodology/approach To estimate the model, the green finance index is used as a proxy for GF. It encapsulates the government’s efforts in funding environmental protection, conservation projects and climate change mitigation initiatives. The proxy for GI is derived from the number of patents filed related to environmental technologies and sustainable practices. Data on carbon emissions are obtained from the Global Carbon Atlas. The study used the autoregressive distributed lag (ARDL) model to check the long-run association among variables. Findings This study explores the influence of GF, green innovation and GPR on India’s consumption and production-based carbon emissions. According to the study, GF, renewable energy, green innovation and GPR reduce carbon emissions from production and consumption. Notably, higher GPR is associated with lower emissions, suggesting that geopolitical shocks can dampen economic activity and energy demand. The authors also observe a short-run rise in production-based emissions (PCO2) associated with green innovation, likely reflecting transitional effects of technology deployment. On the contrary, trade openness increases carbon emissions. Originality/value Unlike prior studies, this study explicitly integrates an international GPR index alongside GF and innovation, and distinguish between production- and consumption-based emissions. The study provides valuable insights to policymakers on effective strategies to mitigate environmental degradation in a developing country like India. Because India is among the world’s top emitters, the Indian evidence on GPR-linked emissions and dual accounting has direct implications for global climate governance, trade carbon accounting and cross-border energy diplomacy.

Energy transition, natural resource consumption and environmental degradation: The role of geopolitical risk in sustainable development