Geopolitical risks and carbon emissions: the mediating effect of industrial structure upgrading

Rongrong Li, Qiang Wang () and Xueting Li
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Rongrong Li: China University of Petroleum (East China)
Qiang Wang: China University of Petroleum (East China)
Xueting Li: China University of Petroleum (East China)

Palgrave Communications, 2025, vol. 12, issue 1, 1-15

Abstract: Abstract This study investigates the complex relationship between geopolitical risks and carbon emissions, highlighting the mediating role of industrial structure upgrading. A threshold effect model combined with bootstrap estimation is applied to panel data from 41 countries. The results indicate that geopolitical risks significantly influence carbon emissions, with divergent impacts observed across different economic contexts. In high-income countries, geopolitical tensions typically lead to increased carbon emissions due to strategic shifts in energy resource allocation. Conversely, in lower-income countries, such risks often result in decreased energy demand and reduced emissions. The study further examines how industrial structure upgrading modulates the interaction between geopolitical risks and carbon emissions. The results indicate that industrial structure upgrading exhibits a double-threshold effect. As the industrial structure value changes, the impact coefficient of geopolitical risk on carbon emissions globally decreases from 0.103 to −0.030, whereas in high-income countries, the coefficient decreases from 0.048 to –0.029. This study offers policy insights for mitigating carbon emissions in the context of geopolitical risks.

Date: 2025
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DOI: 10.1057/s41599-025-05172-5

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