The impact of geopolitical risk and policy uncertainty on CO₂ emissions: A CS-ARDL analysis of G7 economies

The study examines the long-term relationships between human development, economic growth, and environmental conditions in South Korea from 1996 to 2021. Understanding these interactions is crucial for shaping policies that balance economic progress, social well-being, and environmental sustainability. The analysis employs cointegration techniques, including the Fully Modified Ordinary Least Squares (FMOLS) and Canonical Cointegration Regression (CCR) methods, to estimate long-run relationships among GDP per capita, the Human Development Index (HDI), and carbon dioxide emissions per capita. Empirical findings confirm a stable long-term equilibrium between GDP and HDI, as demonstrated by significant Engle-Granger and Phillips-Ouliaris test statistics (p-values ≤ 0.0245). The results suggest that economic growth consistently enhances human development, while improvements in HDI contribute to sustained economic progress. The relationship between HDI and carbon emissions per capita, however, yields mixed evidence. The Engle-Granger test supports a long-term association (p-values ≤ 0.015), but the Phillips-Ouliaris test does not confirm cointegration (p-values ≥ 0.112). The covariance matrix test indicates that the negative relationship between HDI and carbon emissions per capita is stronger and more variable compared to the more stable inverse association between HDI and GDP per capita. Additionally, Granger causality analysis reveals a significant causal relationship between HDI and GDP per capita, supported by a Chi-square value of 20.627 and a p-value below 0.001. These findings highlight the complexity of integrating environmental considerations into development policies. South Korea’s experience underscores the necessity of a balanced policy framework that ensures sustainable economic growth while advancing human development and mitigating environmental impacts.

Type of the article: Research Article

This study aims to investigate how geopolitical risk shocks influence return dynamics, volatility transmission, and hedging properties across sustainable financial assets, financial technology instruments, energy markets, and precious metals during major global crisis episodes over a daily period from June 15, 2018, to September 14, 2024. We examined three major events: the trade conflict between the United States and China from June 15, 2018, to November 30, 2019; the COVID-19 pandemic from December 22, 2019, to February 23, 2023; and the ongoing wars between Russia and Ukraine, as well as Hamas and Israel, from February 24 to September 14, 2024. We found anomalies explained by the volatility of these returns. Using static, dynamic, and fractional QVAR methodology, we concluded that gold and two indicators of green finance can be considered safe-haven assets and hedging instruments, while FinTech plays a stabilizing role during these crises. Spillovers and connectivity networks at the median quantile validate the negative impact of geopolitical risk on non-renewable energy. However, we observed that the geopolitical risk index does not significantly affect green finance indicators, eco-friendly cryptocurrencies, or various measures of FinTech, with a low sensitivity of this index to gold prices.

This study examines the impact of renewable energy consumption, CO₂ emissions, and renewable electricity generation on the Sustainable Development Index in Uzbekistan over the period 1990–2023. Using an autoregressive distributed lag (ARDL) model, the study estimates the short- and long-run relationships between these variables. The Sustainable Development Index is constructed using indicators of primary school enrollment, life expectancy at birth, and female labor force participation using a min-max normalization method. The results indicate a long-run positive impact of renewable energy consumption (β = 0.0552, p < 0.05), underscoring its significant contribution to sustainable development. Conversely, renewable electricity generation has a significant negative impact in the long run (–0.0153, p < 0.01), which may be due to initial high transformation costs and short-term economic adjustments. CO₂ emissions did not have a statistically significant impact on the Sustainable Development Index. The model is robust, with no autocorrelation or heteroscedasticity issues, indicating reliable results. This study underscores the importance of strategic investments in renewable energy and offers valuable insights for policy development, thereby enhancing Uzbekistan’s sustainable development trajectory.