Natural resources-sustainable environment conflicts amidst COP26 resolutions: investigating the role of renewable energy, technology innovations, green finance, and structural change

Abstract

ABSTRACT Today, the world is encountering one of the most challenging moments in history due to the surging levels of greenhouse gas (GHG) emissions linked to many factors, with natural resources standing out. The recent COP26 extensively echoes the need for a conscious exploration of natural resources in a bid to sustain the ecosystem for the present and future generations. To this end, the current research probes the impacts of natural resources vectoring oil, coal, and gases, on CO2 emissions in selected 10 top natural resource-dependent countries from 1995 to 2019. Additionally, the model considers the pertinent role of renewable energy, green finance, structural change, and technology advancement. The empirical evidence relies on preliminary tests comprising cross-sectional interdependence tests, homogeneity tests, stationarity tests, and cointegration tests that account for the issue of cross-sectional dependence in the panel model, all of which conform to the expected rule of thumb. Besides, second-generation estimators such as CS-ARDL, CCEMG, AMG, and the novel quantile regression, are employed to evaluate the empirical model. The results show that natural resources exacerbate CO2 emission surge. However, moderating impacts are evident from renewable energy, structural change, green finance, and technology. The heterogeneous effects which emanate from quantile regression indicate that the main results are robust. Consequently, cutting down fossil fuels subsidies and increasing investment in renewable energy constitute key recommendations advanced by this study.