Relationship between remittances and carbon emissions: An evidence of top five remittance-receiving countries

This study examines the environmental effects of remittances in the five largest remittance-receiving countries (India, Mexico, China, the Philippines, and Pakistan) using panel data from 1990 to 2022 sourced from the World Development Indicators. The study employed a quantitative and analytical research design. Remittances are a critical component of economic stability in these countries, yet their impact on carbon emissions and environmental sustainability remains underexplored. The study utilized a dynamic ordinary least squares (DOLS) method to analyze study variables. Unit root and cointegration tests were performed to assess long-run relationships. A dynamic ordinary least squares (DOLS) (pooled estimation) results revealed that GDP per capita and trade openness have significant positive influences on CO₂ emissions. On the contrary, urban population has significant negative influences on CO₂ emissions. In contrast, remittances show no notable effect on CO2 emissions. Furthermore, the results show significant long-run cointegration among the variables, with GDP per capita, trade openness, and urban population identified as major drivers of CO2 emissions. These findings indicate that economic growth, trade liberalization, and demographic expansion are key drivers of environmental degradation, while the direct environmental impact of remittances appears minimal. The study recommends policymakers prioritize environmentally sustainable investments to align remittance-driven economic growth with global climate goals.