The role of natural resources rent, trade openness and technological innovations on environmental sustainability – Evidence from resource-rich african nations

Abstract

Environmental sustainability is fundamental in ensuring the needs of current generation are not met through exhausting the resources available to meet the needs of the future generations. Nature provides key resources required as factors of production in the production of goods and services. Therefore, it is important to maintain and protect the environment, ensuring that these resources do not deplete. This study investigates the role of technological innovations, trade openness, economic growth and natural resource rents in maintaining environmental sustainability. The data of the top ten natural resource-rich African countries are used for the time ranging from 1996 to 2023. The main novelty of the research is that it considers countries with abundance natural resources in ascertaining the influence of natural resources on environmental sustainability; hence, ascertaining the existence of resource curse in developing nations with abundance natural resources. Data is analysed with the Methods of Moments Quantile Regression that present robust results when heterogeneity and cross-sectional dependency are present. We present that technological innovations, trade openness, renewable energy and governance promote environmental sustainability in these resource-rich nations of Africa. Technological innovations fosters environmental sustainability in the long and short term. We also present that economic growth and natural resource rents worsen the quality of the environment, through raising the emission of carbon. Specifically, natural resource rents significantly raises the emission of carbon in the long term. Policies proposed advocates for the advancement in the rule of law of nations and the promotion of technological innovations.