Natural Gas Rents Research Articles

Non-linear effects of three core mineral resources, energy uncertainty, and inclusive digitalization on economic growth: A comparative analysis of US and China

This study examines the asymmetric effects of mineral resources (oil, coal, and gas), digitalization, and energy uncertainty on economic growth in China and the USA. Using quarterly data from 2000 to 2022, we employ the nonlinear autoregressive distributed lag (NARDL) model to analyze these relationships. The study begins by conducting unit root tests, cointegration analysis, and asymmetry tests to establish robust connections between the variables. The long- and short-run results confirm the presence of asymmetry, as positive and negative shocks in oil rents, digitalization, and energy uncertainty affect economic growth differently. Notably, positive shocks in oil rents and digitalization favour economic growth, indicating that increases in oil rents and digital inclusion contribute to economic development. Conversely, positive shocks in energy uncertainty tend to reduce economic growth. Interestingly, the findings for China and the USA show similar asymmetric patterns; coal and natural gas rents positively influence economic growth, while the control variables suggest that capital and labour increase contribute to both countries' development. The error correction terms, 0.731 (73.1%) for China and 0.625 (62.5%) for the USA, indicate the annual rate at which asymmetric discrepancies are corrected. All diagnostic tests confirm the suitability of the NARDL model for this study. Finally, the study reveals significant bi-directional causality among all pairs of variables.

Natural resources, a curse or blessing for international trade? Empirical evidence from CAREC nations

AbstractThere is a huge pile of literature, accessible on economic growth (GDP), natural resource rents (NR), mineral rents (MR), natural gas rents (GR), oil rents (OR), and forest rents (FR) but it does not address the association between trade openness (TO) and the availability of these resources. Thus, this study objectively probes the link among these resources and TO in CAREC nations (Georgia, China, Pakistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan) from 2000 to 2022. Mongolia, Afghanistan, and Tajikistan from CAREC countries are exempted in this inquiry due to unavailability of the data for the variables, GR, MR, and OR. The key methods used in this inquiry include method of moment quantile regression (MMQR) followed by Westerlund analysis, slope heterogeneity, CIPS unit root test, cross‐sectional dependence (CSD), and matrix correlation. The MMQR yields valid, trustworthy, and robust results. The empirical estimates demonstrate that MR and OR suggest significant positive impacts on TO. However, NR, GR, FR, and GDP have negative association with TO in CAREC countries. Besides, the research offers pertinent theoretical, and managerial blueprint proposals for global commerce by utilizing MR, OR, FR, and NR contributing to sustainable development goals (SDGs) by fostering economic development, promoting sustainable development, and addressing environmental and social challenges, and highlighting the real impact and association of these resources with TO based on empirical aftermath of the study.

How does oil policy uncertainty influence resource rents? New empirical evidence from Organization of the Petroleum Exporting Countries

AbstractThe uncertainty surrounding oil‐related policies has raised concerns about its influence on revenues derived from resource extraction activities. In this view, the current study aims to investigate the nuanced relationship between oil policy uncertainty (OPU) and resource rents, focusing on oil rents (ORTs), natural gas rents (NRTs), and total resource rents (TRT). Analyzing data spanning from 1985 to 2019 across Organization of the Petroleum Exporting Countries, various econometric models including DOLS, FMOLS, and autoregressive distributed lag are employed to assess the impact of OPU on resource rents. The empirical findings reveal a significant negative effect of heightened OPU levels on resource rents, indicating a reduction in ORT, NRT, and TRT. This negative impact underscores the deterrence of long‐term investments in oil exploration and production due to regulatory unpredictability, leading to decreased revenues from oil extraction activities. Additionally, increased OPU contributes to heightened volatility in oil prices, disrupting the stability of resource rents. Furthermore, variables such as FDI inflow, inflation rate, and banking sector development exhibit positive relationships with resource rents, emphasizing their role in bolstering revenues derived from natural resources. The study's implications highlight the necessity for policymakers to address and mitigate OPU to foster stability and sustainable revenues within resource‐driven economies. This study contributes to the existing literature by offering empirical insights into the adverse impact of OPU on resource rents.

Multifaceted natural resources and green energy transformation for sustainable industrial development

Climate change is the most phenomenal challenge to humanity, and its roots are intervened with unsustainable industrialization, exercising overexploitation of natural resources. Therefore, the departure from non-renewable to renewables has become inevitable, though thought-provoking. In this respect, we explore how green energy transformation moderates the impacts of multifaceted natural resources on sustainable industrial development in the presence of other covariates involving technological progress, financial development, and economic progress. We compiled data from Group of Seven (G-7) members over the 1995−2018 period and applied panel quantile regression (PQREG) to capture the effects across varying levels of quantiles of sustainable industrial development. Results revealed a positive role of natural gas rents, while coal, forest, and total natural resource rents contributed adverse implications for sustainable industrial development. However, the green energy transformation proved to be the game changer because it not only directly induced sustainable industrial development improvement but also turned the unfavorable effects of coal, forest, and total natural resources into favorable ones by interacting with those multifaceted natural resources. Technological, financial, and economic progress supported sustainable industrial development in G-7 nations, particularly in members with existing middle and upper scales of sustainable industrial development. These findings are robust enough when subjected to different estimation tools. In light of these outcomes, the interaction between green energy transformation and natural resource policy is inevitably critical to attaining natural resource efficiency for sustainable industrial development. Therefore, it is imperative to establish a close policy coordination between advancing green energy technology and allocating natural resource revenue to achieve sustainable development goals (SDGs), with a particular emphasis on SDG-7 and SDG-13.

From black to green: Quantifying the impact of economic growth, resource management, and green technologies on CO2 emissions

In an exploration of environmental concerns, this groundbreaking research delves into the relationship between GDP per capita, coal rents, forest rents, mineral rents, oil rents, natural gas rents, fossil fuels, renewables, environmental tax and environment-related technologies on CO2 emissions in 30 highly emitting countries from 1995 to 2021 using instrumental-variables regression Two-Stage least squares (IV-2SLS) regression and two-step system generalized method of moments (GMM) estimates. Our results indicate a significant positive relationship between economic growth and CO2 emissions across all quantiles, showcasing an EKC with diminishing marginal effects. Coal rents exhibit a statistically significant negative relationship with emissions, particularly in higher quantiles, and mineral rents show a negative association with CO2 emissions in lower and middle quantiles, reinforcing the idea of resource management in emissions reduction. Fossil fuels exert a considerable adverse impact on emissions, with a rising effect in progressive quantiles. Conversely, renewable energy significantly curtails CO2 emissions, with higher impacts in lower quantiles. Environmental tax also mitigates CO2 emissions. Environment-related technologies play a pivotal role in emission reduction, particularly in lower and middle quantiles, emphasizing the need for innovative solutions. These findings provide valuable insights for policymakers, highlighting the importance of tailoring interventions to different emission levels and leveraging diverse strategies for sustainable development.

Nexus between total natural resource rents and public debt within symmetric and asymmetric framework: Fresh insight from resource-rich economy

Many economies abundant in natural resources often leverage the rents from these resources as collateral for borrowing during periods of economic boom, intending to repay debts during periods of windfall. However, this practice can cultivate irresponsible borrowing tendencies, potentially leading to debt trap scenarios when global resource prices decline. Thus, our study delves into the interaction between public debt (PD) and total natural resource rents (TNR), examining both aggregate and disaggregate forms, with a specific focus on India spanning from 1980-81 to 2021–22.Our aggregate analysis reveals that PD exhibits heightened responsiveness to negative shocks in TNR compared to positive shocks, indicating an asymmetric impact of TNR on PD within the Indian context. Additionally, disaggregate analysis uncovers that both positive and negative shocks in coal rents (CR), natural gas rents (NGR), and forest rents (FR) significantly and adversely affect PD. Furthermore, a positive shock in mineral rents (MR) demonstrates a negative and significant impact on PD, while a negative shock in MR yields a positive but insignificant impact on PD. Overall, barring oil rents (OR), other forms of resource rents such as CR, NGR, FR, and MR showcase asymmetric and negative effects on PD. These findings underscore the importance of prudent institutional behavior and sound economic policies in overseeing and managing debt sustainability in resource-rich economies.

How disaggregated natural resources rents affect financial development: From the perspective of sustainable development

Enhancing financial development has emerged as a paramount goal for nations worldwide, reflecting its pivotal role in fostering economic growth, stability, and prosperity. A developed financial system is inevitable for achieving sustainable development in a country. Therefore, it is essential to take measures that promote financial development. Also, promoting financial development entails knowledge of the determinants of financial development. Therefore, the present study intends to investigate whether during the period from 1989 to 2021, whether coal, oil, and natural gas rents have any impact on financial development in China. To that end, we adopt the novel Fourier ARDL modeling. The results claim that oil rent escalates financial development in the long run, while gas and coal rent impede it. On the contrary, oil rent mitigates financial development in the short run, whereas gas and coal rent promote it. Thus, we direct several policy stances to promote financial development.

Resource dynamics and economic expansion: Unveiling the asymmetric effects of natural resources and FDI on economic growth with a lens on energy efficiency

Sustainable development recognizes the crucial role of a sustainable environment as a foundational component. Addressing climate change is acknowledged as a global challenge that requires a collective approach to effectively combat this issue. While developed economies often experience a higher prevalence of this problem, it remains essential to develop a strategy that goes beyond national borders in managing natural resources and their influence on sustainable economic progress. Hence, this research inspects the linkage of natural resources, FDI, and economic growth in the USA from 1990 to 2022. The study also included energy efficiency as a control variable. Pertinent time series procedures such as DF-GLS and Phillips-Perron tests of unit root specification while Johansen cointegration test for equilibrium and Bootstrap quantile regression for primary estimates have been utilized in the research. The research also included robustness check analysis through FMOLS, DOLS, and CCR as parametric procedures, while simple quantile regression as a non-parametric robustness method. The outcomes reveal that data of the variables are static at differences in both methods and long-run equilibriums in the variables. The empirical outcomes suggest that natural resources are asymmetric with economic expansion in the USA. Natural gas rents positively impact economic expansion, leading to resource blessings, while mineral resources have a resource curse in the economy. Moreover, energy efficiency and FDI stimulate economic growth across all quantiles. The robustness check protocols follow the same trajectory and found that outcomes are robust, valid, and reliable in both linear and non-linear methods. It is recommended that NRR be expanded and channelized into the real sectors of the economy, along with the encouraging role of foreign inflows and investments in energy efficiency to attain sustainable development in the USA.

Resources extraction and access to clean energy a curse or blessing for the economy? Middle-income economies case study

The study evaluates the long-lasting and debatable issue of the resource-growth nexus, which unearths whether natural resources have a curse or blessing on economic growth. Hence, this research revisits the nexus of natural resources and economic growth in middle-income economies with more relevant and effective variables: energy efficiency and access to clean fuel technology from 1988 to 2021. The study leveraged various time series methods, including the ADF-GLS stationary analysis to govern the stationary sequence and the Bayer-Hanck cointegration test for long-term cointegration. The primary methods include FMOLS, DOLS, and CCR, which reveal long-term elasticities between dependent and independent variables. Both non-parametric quantile and parametric robust regression are used for robustness checks. The results reveal that time series were found static D (1) and long-term cointegration occurs between economic growth and its regressors: mineral rents, natural gas rents, energy efficiency, and access to clean fuel technology. The empirical findings exhibit that natural gas and mineral rents show an encouraging influence on the economy's growth in middle-income economies, confirming the blessings of these resources. Moreover, energy efficiency and access to clean fuel technology allow effective use of natural resource rents and endorse supportable economic growth. The robustness check scrutiny confirms the results via robust regression, while the robustness test of quantile regression displays asymmetries in the mineral rents and natural gas rents across quantiles. These results indicate several policy implications to policymakers regarding the use of energy efficiency and access to clean fuel technologies should be increased and encouraged to allow the effective use of natural resources for sustainable expansion of the economy.

Maximizing natural resource rent economics: The role of human capital development, financial sector development, and open-trade economies in driving technological innovation.

Technological innovation is considered one of the most significant production variables. The influence of natural resource rents on this factor is crucial to the success of nations' sustainability with abundant natural resources. Driven by a theoretical argument, this research investigates the impact of natural resource rents on technological innovation by engaging the "instrumental variable fixed-effect method." With "Driscoll-Kraay's robust standard errors," the research accounts for "cross-sectional dependency" in a panel of 79 economies from 1995 to 2021. The empirical results confirm that natural resource rents positively and significantly impact innovation measured with trademark and patent applications. The findings also indicate that the components of natural resource rents, such as oil and natural gas rents, significantly promote technological innovation. The findings also indicate the roles of human development, financial development, and trade economies in the impact of natural resource rents on technological innovation. Due to heterogeneity, the analysis categorizes countries based on their economic development into "developed," "transition," and "developing" economies. The article finishes with policy implications, arguing that natural resource rent support a more resource-efficient economy and move toward a more circular economy targeted for sustainability. Therefore, emerging markets that initiate natural resource rents can support human capital and financial services through financial sector development and trade in maximizing technological innovation.

Are natural resources a driving force for financial development or a curse for the economy? Policy insight from Next-11 countries

This research examines the N-11 economies from 1990 to 2020 from the standpoint of the connection between natural resources and financial development, considering such control variables as energy consumption and FDI. This study further used Panel data, as well as the most appropriate method, such as Panel Quantile Regression (PQR) for a long-run connection, to examine the status of N-11 economies and track the dynamic interaction of several significant elements through time. Here are some of the most important model results: Panel cointegration tests show that the variables in question are indeed related in the long run. Interestingly natural resources like Oil rents reduce financial development while natural gas rents enhance financial development. The control variables such as foreign direct investment (FDI) and energy use (ENR) increase financial development in the targeted economies. Strong policy implications stem from our empirical findings, which stress the importance of encouraging both energy use and foreign direct investment (FDI) for the efficient utilization and supervision of natural resources in the service of financial development.

Resources abundant economies and sustainability of economic growth: A novel panel evidence of high resources economies

In the contemporary era, where some countries are in the transition stage for attaining a sustainable environmental and economy, several economies worldwide are still resources dependent due to abundant natural resources. This study examines the influence of natural resources' components on the financial system's sustainability in resources abundant economies during 1989–2021. Second-generation panel techniques are utilized for empirical examination, revealing the long-run cointegration between the study variables. Following the non-normality characteristic of the data, this study uses the novel non-parametric approach and found that natural resources' components heterogeneously affect financial expansion in the region. Specifically, mineral rents are playing a progressive role in developing the financial system. However, forest, oil, and natural gas rents significantly harm financial development. The empirical results depicted that economic growth significantly contributes to the countries' financial development. This study suggested revisiting policies regarding the sustainable extraction of natural resources and using higher economic growth for sustainable financial development.

Multidimensional financial development and natural resources: A path for sustainable development via natural resources and digitalization

An excess of studies are presented concerning the linkage of natural resources-economic-growth-sustainable development; however, the role of natural resources and economic expansion in multidimensional financial development is lacking, particularly in the context of the USA. This study underpins the extant literature by examining the role of natural resources and economic growth on the financial development index of the USA from 1980 to 2021. The research also encompassed digitalization as a controlling co-variates in the study. Various time series econometric procedures have been leveraged to analyze the data, which contains two-unit root tests (ADF and Phillips Perron tests) to determine the static properties of the variables before examining the long-term equilibrium (Bayer and Hanck cointegration test) between variables for the long run elasticities between variables, FMOLS, DOLS, and CCR is used. We also deployed robustness check analysis tests in the study. The outcomes of the research demonstrate asymmetric results. Mineral rents and natural gas rents significantly and positively improve financial development, while oil rents and coal rents have detrimental effects on the financial development index of the USA. In a non-parametric test of quantile regression, the results are similar, but mineral and natural gas rents are insignificant and positive. GDP and digitalization also improve the financial development index. The robustness check also validates the results of the preferred models. The causality analysis exhibits that GDP, natural resources (mineral rents, coal rents, oil rents, natural gas rents), and digitalization have bi-directional causality with the financial development index and confirm the feedback effect. Based on the observed outcomes, the study endorses pertinent policies to policymakers regarding the financial development index by taming digitization, economic expansion, and NRR.

How geopolitical risk and economic policy uncertainty impact coal, natural gas, and oil rent? Evidence from China

While numerous studies have delved into the determinants of natural resource rents, the influence of economic policy uncertainty and geopolitical risk on coal, natural gas, and oil rents remains underexplored. Addressing this lacuna, our study pioneers an examination of the repercussions of economic policy uncertainty, geopolitical risk, and economic growth on the rents of coal, natural gas, and oil in China spanning the period 1990–2021. Utilizing the cutting-edge Fourier ARDL (FARDL) methodology, our findings unveil that economic policy uncertainty notably hampers coal and natural gas rents. Intriguingly, geopolitical risk does not exert a significant influence on coal and gas rents. Moreover, a discernible absence of cointegration between oil rent and the trio of economic policy uncertainty, geopolitical risk, and economic growth was observed. Economic growth emerges as a double-edged sword, bolstering coal rent while adversely affecting gas rent in the long run. To optimize natural resource rents, it is imperative for policymakers to mitigate economic policy uncertainty, thereby invigorating the coal and natural gas sectors. Concurrently, the promotion of economic growth can augment coal rent, but the natural gas sector demands innovative strategies due to its divergent response.

Sustainable development: Uncovering the synergy between natural resources, clean technologies, and economic progress

This study examines the relationship between natural resource rents and economic growth in Asian economies from 1990 to 2021, considering the impact of electricity generated from renewable sources, access to clean fuel technology, and research and development expenditures. The study uses time series data and employs the Bayer-Hanck cointegration analysis to examine long-term cointegration, along with least squares with known structural breaks for the main estimates and robust least squares method for the analysis. The findings suggest that access to clean fuel technology, natural gas rents, and oil rents significantly impact economic expansion without renewable electricity, while mineral rents have insignificant results. Including electricity from renewable energy, access to clean fuel technology, oil rents, and research and development expenditures suggest a positive association with economic growth. In contrast, natural gas rents and mineral rents produce negative results. The study concludes that there is an asymmetric relationship between natural resources and economic growth in the studied Asian economies. The study highlights the importance of effectively utilizing natural resources and promoting renewable energy in Asian economies with natural resource wealth to promote economic growth.

Towards resourceful sustainability: Integrating minerals resources in achieving development goals

Amid growing concerns over the sustainability of resource-driven economies, understanding the specific roles of diverse natural resources becomes crucial. This research delves into the nuanced impacts of various natural resources on economic growth in resource-affluent economies from 1989 to 2022, an area previously overshadowed by generalized studies. Specifically, it evaluates the differential contributions of oil rents (ORNT), natural gas rents (NGRNT), and mineral rents (MNRNT) to sustainable development. Employing rigorous analytical techniques, including diverse panel data methods and the Kao test, the study reveals that oil rents significantly bolsters economic growth, presenting a ‘resource blessing’. In contrast, natural gas and mineral rents tend to precipitate a ‘resource curse’. Crucially, the research underscores the role of population dynamics and energy utilization in these economies, identifying a bidirectional causality between oil rents and energy use, and a unidirectional one with population growth. Interestingly, no causality was observed for natural gas rents and mineral rents. These insights advocate for tailored economic policies that maximize the benefits of oil rents while counteracting the detrimental effects of natural gas and mineral rents, emphasizing efficient resource management for sustainable growth.

How Do Natural Resource Rents Affect the Ecological Footprint? A Study for 24 Nations

The main objective of this study was to analyse the disaggregated effect of natural resource rents on the ecological footprint in 24 countries. The impact of rents from oil, natural gas and minerals was examined. Using the CS-ARDL approach, it was found that these natural resources increase the ecological footprint, albeit by different amounts. For example, oil rents have a greater impact on the environment than natural gas and mineral rents. The latter generate less environmental pollution. In addition, using the approach of Dumitrescu and Hurlin (2012), a bidirectional relationship was found between oil rents and the ecological footprint. A similar result was obtained between mineral rents and this indicator of environmental degradation. This implies that, if countries decide to reduce their ecological footprint, the rents they derive from these resources will be affected. Therefore, it is essential that nations promote environmentally friendly natural resource extraction practices, using advanced technologies aligned with sustainable development principles. In the case of natural gas rents, these were found to cause an impact on the ecological footprint without feedback effects. This means that countries can be sure that decreasing their ecological footprint will not have an economic impact in relation to the rents they earn from natural gas. Therefore, countries are encouraged to continue to promote the sustainable extraction of this resource.

Theorising the climate change accountability of Persian Gulf petrostates

AbstractFor states with political economies largely dependent on oil and natural gas rents, there seems to be little scope for accountability practices that answer for, and curb, fossil fuel production contributing to anthropogenic climate change. Critically engaging with rentier state theory, I examine the climate change accountability of Persian Gulf petrostates according to state responsibility norms under the United Nations Framework Convention on Climate Change (UNFCCC). For both domestic and international actions undertaken by these countries, there is no meaningful climate answerability for responsible actions—that they recognise and/or commit to the phasing down of their oil and natural gas production. There are differences in their emission reduction goals, under the Paris Agreement, that map onto variations in the stability and structure of their political economies, notably between the ‘super‐rentier’ states (UAE, Kuwait and Qatar) and their rentier neighbours (Saudi Arabia and Oman). However, all make ritualistic, long‐term commitments to ‘clean‐carbon’ (net zero‐emission) futures with no plans to reduce hydrocarbon exports. I argue that international climate change obligations should include a responsibility on states to reduce GHG emissions (at source) arising from their domestic‐ and foreign ownership of operational oil and gas fields. State energy companies in the Persian Gulf and elsewhere are key actors in fossil fuel extraction, yet remain insulated, through their corporate identities, from state responsibility norms. Treating state ownership of fossil fuels as a legitimate target of international climate regulation would broaden state accountability for climate change harm.

Spatial effects of trade, foreign direct investment (FDI), and natural resource rents on carbon productivity in the GCC region.

Natural resource rents (NRRs) may determine the environment and economic growth of the GCC countries due to their over-reliance on the natural resource sector. NRRs are the source of income in resource-abundant GCC countries. So, increasing income of these countries could pollute the environment by increasing overall economic activities. Consequently, NRRs could determine carbon productivity in the GCC region through increasing income and carbon emissions. The effects of trade openness (TO), foreign direct investment (FDI), urbanization, and oil and natural gas rents on carbon productivity (CP) are examined in the GCC region from 1980-2021 using the spatial Durbin model. The CP of the GCC countries has spillovers in their neighboring countries. Oil rent reduces carbon productivity in domestic economies and the entire GCC region. Natural gas rent, TO, and FDI increase, and urbanization reduces carbon productivity in neighboring economies and the entire GCC region. Moreover, urbanization reduces carbon productivity in domestic economies as well. The study recommends the GCC countries to reduce reliance on oil rent and increase globalization in terms of TO and FDI in the region to promote carbon productivity. Moreover, GCC countries should also focus more on natural gas rent instead of oil rent to raise carbon productivity.

Natural resources, cleaner electricity production and economic performance

In the era of modernization, the issue concerning the nexus between natural resources, renewable energy production and economic performance is still unresolved. To solve the enigma, this research analyzes the influence of natural resources, renewable electricity production, access to clean energy and technology on the economic performance of the BRICS economies. Evaluating the data from 1990 to 2021, this study observed the validity of the long-run cointegration between the variables. Due to the non-normal data distribution, this study employed a non-parametric estimator and concluded that natural resources have an asymmetric influence on the region's economic performance. Where coal rents have a mixed impact on economic performance, while natural gas rents promote economic performance. On the other hand, electricity production from renewable sources positively affects the economic performance of the countries under consideration. At the same time, access to clean energy and technology harms the region's economic performance. The results are robust and consistent, as verified by the bootstrap quantile regression. Based on the results, this study suggests appropriate policy implications for attaining sustainable regional economic performance.