Impact of economic variables on CO₂ emissions in belt and road and OECD countries

The rebirth of the Belt and Road Initiative (BRI) programme have necessitated the study as it has a vast potential to promote economic growth, yet, marred with numerous energy use and ecological concerns. The article is the first to comparatively examine the impact of economic variables on consumption-based CO₂ emissions in the BRI and the Organisation for Economic Co-operation and Development (OECD) countries by testing the Environmental Kuznets Curve (EKC) and the Pollution Haven Hypothesis (PHH). The Common Correlated Effects Mean Group (CCEMG) estimates the results. Income (GDP) and GDP² positively and negatively impact CO₂ emissions in the three panels, validating the EKC. Foreign direct investment (FDI) significantly affects CO₂ emissions for the global and BRI panels, supporting the PHH. However, the PHH is refuted for the OECD panel as the impact of FDI on CO₂ emissions is negative and statistically significant. GDP and GDP² decline by 0.029% and 0.0446%, respectively, for BRI countries, compared to OECD countries. It is recommended that BRI countries enact new and stringent environmental laws and use more tidal energy, solar energy, wind power, bioenergy, and hydropower instead of fossil fuels, for the sustainable attainment of higher economic growth, devoid of pollution.