Linking natural resources, innovations, and environment in the Belt and Road Initiative countries using dynamic panel techniques: the role of innovations and renewable energy consumption.

Abstract

The issue of natural resources and environment are a matter of clashing argument in recent studies. An increase in natural resources raises economic growth which in turn increases carbon emission, thatis a challenge for environmental sustainability. There is a lack of research on weather innovations playing any important role by acquiring renewable energy sources, enhancing energy efficiency, and boosting economic growth by lowering the use of natural resources to raise environmental quality. Consequently, this study investigates the effect of natural resources, innovations, economic growth, and renewable energy consumption on carbon dioxide emission in 39 Belt and Road Initiative countries from 1981 to 2019. OLS, fixed effect, and generalized method of moments models were used for analysis, where the results indicate that natural resources, innovations, and economic growth significantly increase carbon dioxide emission, while renewable energy reduces emission and raises environmental quality. The square term of natural resources is negative; thus, it indicates that natural resource use reduces emission when it reaches a certain level. Likewise, our results validate the Environmental Kuznets Curve hypothesis in the Belt and Road initiative countries. The findings have considerable policy implications for the Belt and Road countries regarding natural resource use, innovations, and renewable energy consumption.