Do Inflation and Unemployment Rates Affect Environmental Quality in the Case of RECAI Countries?

This study examines the impact of inflation and unemployment on CO 2 emissions in the Renewable Energy Country Attractiveness Index (RECAI) nations over the period 2003–2022. By employing the common correlated effects mean group estimator, the results suggest that both inflation and unemployment are negatively associated with CO 2 emissions. The policy implications suggest that governments and financial institutions must prioritise sustainable economic policies, incentivise green investments, and promote employment strategies aligned with low-carbon transitions.