Natural resources and COP26 targets of developed countries: Pandemic perspective of natural resources extraction

Abstract

Since there is an ever-growing discussion about reducing the level of global emissions and extracting natural resources. The current study will address this issue by examining the long run relationship between natural gas rents, mineral rents, research and development, economic development, and CO2 emission. This study investigates the group of all OECD economies from 1988 to 2021. To assess environmental sustainability, the study employs the Bayer and Hanck (B&H) and the Johansen cointegration test. Further, for long run estimates, fully modified ordinary least squares, dynamic ordinary least squares, and canonical cointegration regression are implemented. To check the robustness of estimates, robustness Quantile regression is utilized. The empirical findings revealed that natural resource rents have a heterogeneous impact on CO2 emissions. For instance, natural gas rents are harmful to environmental quality, while mineral rentals have a negatively affect carbon emissions. Furthermore, it has been discovered that carbon emissions are negative regarding research and development. On the other side, economic development has a positive influence on CO2 emissions and therefore, damaging impact on environmental sustainability. The empirical findings suggest increased investment in R&D and the prohibition of excessive natural resource extraction, as well as the study's recommended effective and managed utilization of resources.