Environment and natural resources degradation under COVID-19 crises: Recovery post pandemic

Environmental stability improved during the covid 19 pandemic when production and industrial activities, and natural resources depletion processes stopped during the lockdown environment worldwide; however, based on the judgment of COP26 and the recent COP27, environmental degradation increased in the world in post-pandemic; therefore, policymakers and researchers re-focused their attention on the determinants of CO2 in economies. Hence, this study investigates the nexus of natural resource rents, including oil rents, mineral rents, and coal rents, on the carbon emissions of upper-middle-income economies from 1984 to 2021. The study included economic growth and renewable energy as additional determinants. We have presented detailed time series methods that aid in examining the modeled variables characteristics in the current research, i.e., ADF and ADF-GLS for a unit root in the data variables and considering their stationarity, Johansen cointegration for long-term cointegration among variables, FMOLS, DOLS and CCR for the long run elasticities between dependent and independent variables and Granger causality test in our range of methods. Robustness checks analysis is done through a non-parametric approach by quantile regression and robust regression analysis. Our results exhibit that two natural resource rents that are oil rents and coal rents, have adverse impacts on carbon emissions, and both are positive and significant. In contrast, mineral rents have no statistical significance and role in the carbon emissions of upper-middle-income economies. Moreover, economic growth and renewable energy also positively and significantly impact carbon emissions. Granger causality analysis exerts that natural resources rents, except for mineral rents, economic growth, and renewable energy, all granger causes CO2 emissions, and the feedback is also true. The relevant findings are suitable for policymakers in upper-middle-income economies to ensure environmental sustainability in upper-middle-income economies.