Striving for carbon neutrality and economic prosperity in the top ten emitting countries: Testing N shape Kuznets curve hypothesis

Abstract

Environmental deterioration brought on by the top ten greenhouse gas emitters is a critical worldwide issue with far-reaching ramifications for global economic sustainability. The main purpose of this research is to explore the link between economic growth, energy consumption, trade openness, and environmental factors with a focus on achieving carbon neutrality without compromising economic growth in the top ten emitting countries by employing a dynamic STIRPAT modeling technique. The data used in this research was taken from various sources, such as the International Energy Agency and the World Bank. The research found a robust association between energy consumption and economic growth, with a correlation coefficient of 0.87. The results revealed that carbon emissions (CO2) are positively related to per capita gross domestic product (PGDP), cubic GDP (GDP3), international tourism arrivals (Tour) and energy consumption (EC), while negatively related to trade openness (TO) and squared GDP (GDP2) in the top ten emitting countries, confirming the N shaped Kuznets curve hypothesis. Trade liberalization also impacted emissions with a coefficient of 0.65 (p < 0.01). The findings suggest that in order to simultaneously achieve carbon neutrality and continue economic development, it is imperative for the major polluting countries to embrace renewable energy sources and enact environmentally beneficial trade and economic measures.