Natural Resource Depletion, Green Innovation, and Environmental Sustainability in OECD Countries : An Empirical Analysis (2000–2022)

Sammanfattning

This thesis examines the determinants of environmental sustainability in 36 OECD countries over the period 2000–2022, focusing on the roles of natural resource depletion, resource taxation, green innovation, and institutional quality. The primary dependent variable is CO₂ emissions per capita, with ecological footprint and load capacity factor used in robustness checks. The study tests the Environmental Kuznets Curve (EKC) hypothesis using three complementary panel estimators: Fully Modified OLS (FMOLS), Dynamic OLS (DOLS), and the Cross-Sectionally Augmented Autoregressive Distributed Lag model (CS-ARDL). FMOLS corrects for endogeneity and serial correlation through non-parametric adjustment; DOLS addresses endogeneity by including leads and lags of differenced regressors; and CS-ARDL accounts for cross-sectional dependence by augmenting regressions with cross-sectional averages. All three estimators yield qualitatively consistent results, providing confidence in the robustness of the findings. The main empirical results are fourfold. First, natural resource depletion significantly increases CO₂ emissions, with a 1% increase in resource depletion associated with approximately 0.07–0.09% higher emissions. Second, environmentally related tax revenue reduces emissions by approximately 0.09–0.11% per 1% increase in revenue, consistent with the expectation that higher levels of environmental taxation alter incentives and reduce polluting activity in the spirit of the Pigouvian principle. Third, green innovation, measured by environment-related patents per million population, reduces emissions, though with heterogeneous effects across countries and time lags. Fourth, institutional quality both directly improves environmental outcomes and moderates the impact of the other variables, amplifying the benefits of taxation and innovation and mitigating the harm from resource depletion. The EKC hypothesis receives support, with an estimated income turning point of approximately $45,000–$50,000 per capita (constant 2015 USD).