Modeling the Relationship Between Economic Complexity and Environmental Degradation: Evidence From Top Seven Economic Complexity Countries

Abstract

The continuous growth in CO 2 emissions of nations around the globe has made achieving the aim of sustainable development extremely challenging. Therefore, the current research assesses the connection between CO 2 emissions and economic complexity in the top 7 economic complexity countries while taking into account the role of economic growth, renewable energy consumption, and globalization for the period between 1993 and 2018. The research aims to answer the following questions: 1) What is the association between CO 2 and the regressors in the long-run? 2) What are the effects of renewable energy consumption, economic growth, economic complexity, and globalization on CO 2 emissions? The research utilized the CS-ARDL, CCEMG and panel causality approaches to investigate these interconnections. The empirical outcomes revealed that economic growth and economic complexity increase CO 2 emissions while renewable energy consumption and globalization mitigate CO 2 emissions. The outcomes of the causality test revealed a feedback causal connection between economic growth and CO 2 , while a unidirectional causality was established from economic complexity, globalization and renewable energy consumption to CO 2 emissions in the top 7 economic complexity countries.