Strategic pathways to combating remittance-induced carbon emissions; the imperatives of renewable energy, structural transformations, urbanization and human development

Abstract

ABSTRACT Remittances are notable environmental quality (EQ) determinant, but their precise effect remains contextual. Moreover, it is still unclear how factors such as renewable energy consumption, structural transformations, urbanization processes and human capital development moderate the remittance-EQ nexus, particularly in countries with the highest share of remittances to gross domestic product. Thus, with annual panel series over 1990–2019 from the top twenty-one countries in such category and estimates of robust panel estimators, including the pool-mean group, dynamic cross-section autoregressive distributed lag (PMG and CS ARDL) and panel nonlinear (PNARDL), the following fresh empirical narratives subsist: (i) The enlisted panel series coevolve with EQ in the long term. (ii) Remittance is an all-time pollution enabler when the other explanatory variables were held constant. (iii) When the moderating variables were incorporated, the influence of remittances on EQ became insignificant (PMG and CS ARDL) and less severe (PNARDL) (iii) Renewable energy consumption and human capital development possess significant EQ enhancing attributes mostly in the long run, while structural transformations and urbanization promote pollution significantly. Instructively, the optimal pathway is not discouraging remittance inflows; rather, greater proportions of remittances should be invested in renewable energy and human capital. Likewise, it is essential to reappraise the subsisting structural arrangements and urbanization processes to make them answerable to sustainable development goals.