Environmental Sustainability in Emerging Economies: The Impact of Natural Resource Rents, Energy Efficiency, and Economic Growth via Quantile Regression Analysis

Ahmed Salim Abrahem Aboulajras, Wagdi M. S. Khalifa and Ponle Henry Kareem ()
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Ahmed Salim Abrahem Aboulajras: Department of Accounting and Finance, University of Mediterranean Karpasia, Nicosia 99138, Cyprus
Wagdi M. S. Khalifa: Department of Accounting and Finance, University of Mediterranean Karpasia, Nicosia 99138, Cyprus
Ponle Henry Kareem: Department of Business, Cyprus Health and Social Sciences University, Nicosia 99138, Cyprus

Sustainability, 2025, vol. 17, issue 8, 1-18

Abstract: Improving environmental quality is essential for achieving sustainable economic development when nations pursue growth. Although previous studies looked into different factors of sustainability, the precise effects of natural resource rents as well as renewable energy on CO 2 emissions are yet to be studied in depth. This dissertation attempts to fill the gap by looking at the relationship between economic growth, natural resource rents, renewable energy, and the level of financial development with the environmental quality in eleven regions of emerged and developing economies over the time period of 1990 to 2022. The findings from the Pedroni cointegration analysis reveal a long-run association among financial development, renewable energy, natural resource rents, economic growth, and carbon emissions. Further analysis using the method of moments quantile regression (MMQREG) indicates that renewable energy and natural resource rents significantly reduce CO 2 emissions, particularly at higher quantiles, enhancing environmental quality. Conversely, financial development exacerbates CO 2 emissions, negatively affecting environmental sustainability. Economic growth demonstrates a nonsignificant negative relationship with carbon emissions. The study highlights the critical contributions of renewable energy and natural resource rents to improving environmental quality, while emphasizing the adverse environmental effects of financial development. Policymakers are encouraged to prioritize investments in renewable energy and the effective management of natural resources to mitigate carbon emissions and achieve sustainability in these economies.

Keywords: economic growth; energy efficiency; environmental sustainability; MMQREG (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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