Driving towards net zero emissions: The role of natural resources, government debt and political stability

Abstract

Countries worldwide are pursuing measures for reducing emissions in response to the unprecedented impacts of climate change. Several crucial aspects need to be addressed for a carbon neutral future. This study investigates the influence of natural resources, government debts and political stability on achieving net zero carbon emissions. Utilizing cross-country data from 2001 to 2021, the analysis focuses on China, India, Pakistan, and Kazakhstan. The Westerlund panel cointegration test revealed a long-term equilibrium relationship between the variables, suggesting self-correction over time to maintain equilibrium. Our results showed a positive but statistically insignificant relationship between GD and transition to net-zero emissions. Political stability has a negative and statistically significant association with CO2 emissions. GDP has a non-linear impact on CO2 emissions, with increases leading to higher emissions until a certain GDP threshold. Natural resources show a direct relationship with CO2 emissions, indicating that natural resource exploitation adversely affects the transition to net-zero emissions. The Iterated Generalized Least Squares (IGLS) analysis confirmed the robustness of these findings, highlighting the complex interplay between economic, political and environmental factors in the transition to net-zero emissions and the need for balanced, sustainable approaches to economic growth and natural resource management. By shedding light on the critical factors influencing net zero emissions, this study provides insights for policymakers and stakeholders seeking to develop effective strategies for sustainable and environmentally responsible practices.