Resource curse hypothesis in COP26 perspective: Access to clean fuel technology and electricity from renewable energy

Abstract

Most of the previous research on natural resources remains a dilemma in whether the natural resources extraction mend the environmental sustainability or deteriorates it. To consider this issue, we investigate the causal relationship between environmental sustainability, natural resources, economic performance, renewable energy and technology nexus for the Organization for Economic Co-operation and Development countries. To this time, the CO2 emissions serve as a proxy for environmental sustainability, wrapping the period 1989–2021. Hence, the study is based on time series data, advanced cointegration and long-term relationship methods and Granger causality are used. Furthermore, diagnostics and stability tests have also been employed along with the unit root approaches to account for the different structural breaks in the data. The status of the data based on normality is fine and represents that data is normally distributed, requiring only the long-term association of the variables with each other. The study's empirical findings indicate the positive impact of natural resources on environmental sustainability, which shows the resource blessings. The EKC hypothesis also exists in the OECD economies because of the inverse relationship with CO2 emissions. Moreover, the results of renewable energy and cleaner technology are negative, which indicates that despite the up gradation in the environmental sustainability rankings under the targets of COP21 and 26, the usage of renewable energy will still impact the industrial and production sectors of OECD economies. This study suggests the results of the study to policymakers and practitioners the efficient use of electricity and innovative technology to stop the depletion of natural resources further, a convergence of non-renewable energy to renewable energy and reassurance of environmental sustainability under the targets of COP26.