Unveiling the environmental impact of resource Dependency: Developing a resource curse index (RCI) and its effects on carbon, cropland, forest, and fishing footprints

This study presents a detailed and innovative environmental analysis of the resource curse phenomenon by formulating a Resource Curse Index (RCI) encompassing data from 116 countries from 2002 to 2021. Utilizing the Panel Fully Modified Ordinary Least Squares (PFMOLS) methodology, this research investigates the impact of the RCI on various ecological footprints, specifically focusing on Carbon, Cropland, Forest Products, and Fishing Grounds. The findings of the study indicate that computational RCI exerts detrimental impacts on ecological footprint of countries, with these adverse effects becoming more pronounced as the GDP per capita of nations rises. This study exposes the transferring channel of the resource curse to the ecological footprint of countries; one unit increase in RCI leads the expansion of carbon ecological footprint by 0.044 %. As such, the resource curse effects can potentially impose more costs of the environmental regulations on resource rich countries compared to the economies with no or limited natural resources. Indeed, the governments of resource rich countries must understand the link between the resource curse and carbon footprint to ensure appropriate handling of the potential channels of the resource curse. We concluded an inverted U-shaped link between the EKC and all ecological indicators following the variations of the RCI. The higher the level of the RCI, the faster the shift towards the bottom of the curve. However, the use of forest product presents a U-shaped curve at higher RCI levels, indicating complicated behavioural system in resource utilization. • Developed a novel RCI using data from 116 countries (2002–2021). • RCI increases carbon footprints and affects cropland and forest use differently. • Higher GDP per capita amplifies RCI's negative environmental effects. • Emphasizes enhancing institutions and environmental policies in resource-rich nations. • Validates an inverted U-shaped EKC influenced by resource dependency.