Examining the role of natural resource rent, environmental regulations, and environmental taxes in sustainable development: Evidence from G-7 economies

The pressing challenge of climate change necessitates a consensus on the importance of reducing carbon emissions to effectively mitigate its impact. In this context, the present study explores the effect of natural resource rents, environmental regulations, and taxes on trade-adjusted carbon emissions for G-7 countries from 1990 to 2020. Using the method of moment quantile regression, the study finds that at lower quantiles, there exists a negative association between natural resource rents and CO2 emissions, while this relationship becomes positive and statistically insignificant at higher quantiles. The study further demonstrates that environmental regulations and taxes play a crucial role in reducing carbon emissions, emphasizing the significance of implementing sustainable policies that promote environmental protection. Moreover, the analysis indicates that increased renewable energy consumption significantly contributes to lowering carbon emissions in G7 economies. This finding underscores the importance of adopting a balanced approach that integrates economic growth with environmental sustainability. These results have significant implications for policymakers, particularly in the G-7 economies, where climate change is a critical priority. To address this challenge effectively, policymakers must prioritize the implementation of regulations and measures that facilitate a transition to a more sustainable and environmentally friendly economy.