Risk Factors Influence Link Between Natural Resources and Carbon Emissions: Study by Nature

The management of natural resources is crucial for reducing carbon emissions. This study investigates how economic, financial, and political risks influence the relationship between natural resources rents and carbon emissions, using data from 66 countries and employing methods like quantile regression and dynamic threshold regression.

Findings

Consistent Emissions Increase: Natural resources rents tend to increase carbon emissions across different quantiles (0.1 to 0.9), confirmed by robustness checks. This indicates a strong link between resource extraction and higher emissions.
Risk Factors’ Influence: Economic, financial, and political risks affect how natural resources rents impact carbon emissions. Reduced economic and financial risks lessen the emission-boosting effect at higher quantiles, while lower political risk decreases this effect across all quantiles.
Threshold Effects: Economic, financial, and political risks act as threshold factors. For instance, when economic and political risks are low, increased natural resources rents lead to a decline in carbon emissions. This highlights the importance of stable conditions in mitigating the environmental impact of resource rents.

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