Testing the effect of sustainable energy and military expenses on environmental degradation: evidence from the states with the highest military expenses.

This paper aims to define the effects of military expenses and renewable energy consumption on carbon dioxide emissions for the ten countries with the highest military expenses, namely, Saudi Arabia, Israel, Russia, the USA, South Korea, India, France, Australia, China, and the UK from 1993 to 2017. The research applied the common correlated effects mean group estimator (CCEMG), dynamic CCEMG, and cross-sectional augmented autoregressive distributed lag (CS-ARDL) approaches. These dynamic techniques elucidate slope heterogeneity and cross-sectional dependency and solve the problem of unit root bias. It is found that the environmental Kuznets curve (EKC) hypothesis does not apply for this region. The findings demonstrate that military expenses increase carbon dioxide emissions; thus, the treadmill theory of destruction is valid for the panel of these countries, and it is also found that the consumption of sustainable energy decreases CO2 emissions. This suggests that a reduction in pollution can be achieved by increasing sustainable energies in the use of military vehicles to decrease emissions. Further important policy implications for the 10 countries with the highest military expenses are provided at the end of the paper.