Abstract
The effects of economic development on natural environment is explored by momentous literature, this study focuses on exploring the role of institutional quality for environmental protection in the selected One Belt One Road (OBOR) economies. The main goal of the paper is to find the threshold level of institutional quality that may minimize CO2 emissions in the atmosphere due to widespread industrialization and transportation. The data is selected for the panel of 33 OBOR economies over the time period of 1986–2018. The panel threshold regression technique is applied to determine the threshold level of institutional quality. The estimated results of the study reveal that 2.315 is the threshold level of institutional quality in selected partner OBOR countries. If quality of institutions is above the threshold level then CO2 emission do not contribute significantly for environmental deterioration in spite of growing industrialization and transportation and vice versa. The study emphasized to improve the institutional quality up to threshold level to get potential gains from industrialization and transportation.
Highlights
Environmental deterioration is a burning issue and dreadful problem for the world days
One Belt One Road project is initiated by China to develop the relations among host economies in sectors of trade and energy
This study explores the relationship between institutional quality and other variables concerned to environmental performance
Summary
Environmental deterioration is a burning issue and dreadful problem for the world days. The motivation to examine the relationship among CO2 emission, institutions, transportation and industrialization is that; OBOR project will increase the income of partner economies but reduced trade cost will increase the real income of other countries of the world. Environmental protection in one belt one road economies compromising the living standard of people It is a great challenge and important to know for collaborating countries to develop a strategy for reduction of CO2 while getting the potential benefits of OBOR project with special reference to growing industrialization and transportation. There is hardly any study exploring the threshold level of institutional quality to control the adverse effects on environment for OBOR partner countries; the central objective of this paper. Finding the threshold level of institutional quality may have beneficial policy implications for reduction of CO2 emissions as well as economic expansion through industrialization and transportation
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