Revisiting Emissions: How Economic Structure, Financial Development, Urbanisation, Trade Openness, and Natural Resource Rent Shape CO 2 and N 2 O

Thi Phuong Thuy Mai, Bich Ha Dam, Thi Thuy Van Ha, Thanh Van Pho, Gia Quyen Phan and Tran Thai Ha Nguyen ()
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Thi Phuong Thuy Mai: Faculty of Finance and Banking, Van Lang University, Ho Chi Minh City 70000, Vietnam
Bich Ha Dam: Institute of Accounting and Auditing, Thuongmai University, Hanoi 10000, Vietnam
Thi Thuy Van Ha: Institute of Accounting and Auditing, Thuongmai University, Hanoi 10000, Vietnam
Thanh Van Pho: Global Studies Program, University of Massachusetts Lowell, Lowell, MA 01854, USA
Gia Quyen Phan: Faculty of Accounting and Finance, Nha Trang University, Nha Trang City 650000, Vietnam
Tran Thai Ha Nguyen: Faculty of Business Administration and Accountancy, Khon Kaen University, Khon Kaen 40002, Thailand

Sustainability, 2025, vol. 17, issue 11, 1-22

Abstract: Achieving zero carbon emissions is crucial for mitigating climate change and meeting global targets. This study examines the economic and financial drivers of carbon dioxide (CO 2 ) and nitrous oxide (N 2 O) emissions using a panel dataset of 141 developed and developing countries from 1990 to 2020. Employing the generalised method of moments (GMM), the findings indicate that industrial and manufactural activities remain the dominant source of CO 2 emissions, particularly in developed economies, while agriculture is a major contributor to N 2 O emissions, especially in developing countries. While the service sector reduces both emissions, the effect is more pronounced for CO 2 than for N 2 O. Urbanisation, trade openness, and natural resource rents also positively correlate with emissions. However, financial development presents a dual effect, offering the potential for emissions reduction through green financing. These insights underscore the need for targeted policies, including stricter industrial regulations, sustainable agricultural practices, green urban planning, and financial strategies that support low-carbon transitions.

Keywords: economic growth; financial development; urbanization; trade openness; natural resource rent; CO 2; N 2 O; GMM (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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