DOES GEOPOLITICAL RISK RISE CARBON EMISSIONS? EVIDENCE FROM A CS-ARDL MODEL FOR OECD COUNTRIES

Geopolitical risk is a significant concern, as it poses an increasing threat to carbon emissions and ecological systems. This paper investigates the link between geopolitical risk and carbon emissions. It employs a cutting-edge econometric methodology and a thorough preliminary and robustness analysis with a sample of 25 Organization for Economic Cooperation and Development (OECD) countries. Empirical findings demonstrate that geopolitical risk escalation triggers a rise in carbon emissions. Population and gross domestic product per capita leads to an environmental degradation, while trade openness and financial development curb the carbon emissions. The establishment of inter-country dialogues, or various platforms by supranational institutions to fortify the communication between countries, will mitigate geopolitical risks and contribute to environmental sustainability.