Exploring the influence of trade openness, energy consumption, natural resource rents, and human capital in achieving carbon neutrality

Addressing the pressing challenges of climate change and global warming requires a strong commitment to reducing carbon dioxide (CO₂) emissions and achieving carbon neutrality. Efficient energy use and international trade play crucial roles in promoting sustainable development and enhancing environmental quality. This study investigated the relationships of CO₂ emissions with trade openness (export and import), energy consumption (renewable energy consumption and fossil fuel consumption), natural resource rents, and human capital across 20 developing countries (Brazil, Iran, Russia, China, Malaysia, Saudi Arabia, Colombia, Mexico, South Africa, Costa Rica, Morocco, Tunisia, Egypt, Pakistan, Türkiye, India, Peru, Viet Nam, Indonesia, and Philippines) from 1990 to 2022 using the augmented mean group (AMG) and common correlated effects mean group (CCEMG) methods. The findings revealed that export, renewable energy consumption, and human capital significantly reduce CO₂ emissions, while import, fossil fuel consumption, and natural resource rents increase CO₂ emissions, although the effect of natural resource rents is statistically insignificant. Causality tests indicated the bidirectional relationship of CO₂ emissions with export, import, renewable energy consumption, and fossil fuel consumption, and the unidirectional causality from human capital to CO₂ emissions. CO₂ emissions drive the greenhouse effect, thereby raising global temperature and accelerating climate change. As reducing CO₂ emissions becomes an urgent global priority, this study provides actionable insights by identifying key variables that mitigate emissions and enhance sustainability. By bridging research and policy, this study offers targeted recommendations to accelerate progress toward a low-carbon future.