Assessing the Impact of Energy Efficiency and Natural Resource Rents on Carbon Emissions: Evidence from Major Carbon Emitting Countries

The preservation of natural resources, ecosystem balance, and long term economic growth, are essential for environmental sustainability, and well-being for future generations. This study attempts to investigate the factors responsible for carbon dioxide emissions, in ten major carbon emitting countries. Using panel data from 1990–2021, the study applies co-integration, slope homogeneity, and cross-section dependency tests. Results reveal a long-run relationship between CO₂ emissions, energy efficiency, and resource rents. Energy efficiency and renewable energy consumption significantly reduce CO₂ emissions, whereas natural resource rents, urbanization, and economic growth increase emissions, reflecting environmental trade-offs. Moreover, Granger causality analysis shows the results are robust and confirms a bidirectional causal relationships between CO_2-emissions and economic growth, renewable energy, and energy efficiency, while unidirectional linkage between natural resource rents and urbanization.