Foreign Direct Investment, Fiscal Decentralization, and ICT: Pathways to Environmental Sustainability in Canada Under Geopolitical Uncertainty

Babatunde Sunday Eweade

Politická ekonomie, vol. preprint

Abstract: Balancing economic growth with environmental sustainability remains a pressing challenge for Canada, particularly in the face of rapid technological advancement, global integration, and increasing geopolitical uncertainty. This study analyzes the effects of economic growth, foreign direct investment, ICT development, trade openness, fiscal decentralization, and geopolitical risk on Canada\'s CO2 emissions from 1980 to 2022. Using the ARDL bounds test and Toda-Yamamoto causality method, the results confirm that economic growth and other macroeconomic and institutional factors significantly shape emission trends. FDI, trade openness, ICT development, fiscal decentralization, and geopolitical risk all raise carbon emissions in the short and long run. Causality tests show a two-way link between economic growth and CO2 emissions, while the other factors act as external drivers without feedback. These findings underscore the importance of strengthening environmental standards for FDI and trade, expanding clean energy to support digital infrastructure, enhancing intergovernmental coordination on fiscal matters, and improving Canada\'s resilience to geopolitical disruptions. Overall, the study provides new empirical insights and actionable guidance for policymakers aiming to align Canada\'s economic aspirations with its carbon reduction commitments in an increasingly uncertain global environment.

Keywords: Fiscal decentralization; geopolitical uncertainty; economic growth; carbon emissions; ARDL; Toda-Yamamoto causality test (search for similar items in EconPapers)
References: Add references at CitEc
Citations:

Downloads: (external link)
http://polek.vse.cz/doi/10.18267/j.polek.1522.html (text/html)
free of charge

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:prg:jnlpol:v:preprint:id:1522

Ordering information: This journal article can be ordered from
Redakce Politické ekonomie, Vysoká škola ekonomická, nám. W. Churchilla 4, 130 67 Praha 3
http://polek.vse.cz

DOI: 10.18267/j.polek.1522

Access Statistics for this article

Politická ekonomie is currently edited by Jiřina Bulisová

More articles in Politická ekonomie from Prague University of Economics and Business Contact information at EDIRC.
Bibliographic data for series maintained by Stanislav Vojir ().