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Moving towards sustainability: how do low-carbon energy, current account balance, and reserves induce environmental deterioration in the Big 3?

Mubeen Abdur RehmanMuhammad Umer QuddoosMuhammad Sajid AminGhulam Ghouse
Published in: Environmental science and pollution research international (2023)
Promoting financial sustainability is the focus of current state policies while addressing the concerns of environmental pollution. The alarming impacts of climate change on economies motivate us to revisit an intensive empirical study to explore the dynamic relationships of low-carbon energy, current account balance, and reserves with carbon dioxide (CO 2 ) emissions in the most polluted countries across the globe for the years 1981-2020. We applied the dynamic autoregressive distributive lag (D-ARDL) simulation model to investigate the short and long-run connection. The empirical outcomes of the study uncover that in the short run, a 1% increase in renewable energy reduces CO 2 -based emissions by 0.417%, 0.169%, and 0.619% in China, the USA, and India, respectively. We further explored that China's and the USA's economic growth causes environmental deterioration. In contrast, a 1% increase in current account balances improves the environmental quality of China and India by 0.3% and 0.6%, respectively. This research concludes that model variables significantly impact the environment. Therefore, it is necessary to draw policy implications to increase the consumption of low-carbon energy to sustain economic growth by limiting the adverse impacts of economic activities.
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