Mitigating emissions in major oil-exporting countries: accounting for the role of natural resources rents, institutional quality, and business environment

Abstract

ABSTRACTThe present research investigates the linkage between natural resources rent and environmental quality taking into the role of the institutional and business environments. It uses a sample of 15 major oil-exporting countries throughout 2008–2020 and performs the Systems Generalized Method of Moment (SGMM) as an empirical approach. Findings confirm that natural resource rent deteriorates the environmental quality since its coefficient is found to be positively and significantly linked to the dependent variable (CO2 emissions). After dividing the sample into MENA oil-exporting countries and Non-MENA exporting countries, different results were found between these two blocs of countries. Additionally, institutional quality and the environment business are found to play an important role in mitigating the negative impact of natural resources rent on environmental quality. Many lessons could be drawn from this research and many interesting policy implications were drawn from the findings. Policymakers of these countries should work on preserving and protecting the quality of their environment. Policymakers in these countries, notably MENA oil-exporting countries, are invited to invest in clean energy. Additionally, an improvement of the institutional quality and the environment business is needed since they mitigate the negative impact of natural resources rent.