Revisiting the energy-economy-environment relationships for attaining environmental sustainability: evidence from Belt and Road Initiative countries.

The Belt and Road Initiative (BRI) is an ambitious development project initiated by the Chinese government to foster economic progress worldwide. In this regard, this study aims to investigate the dynamics of energy, economy, and environment among 42 BRI developing countries using an annual frequency panel dataset from 1995 to 2019. The major findings from the econometric analyses revealed that higher levels of energy consumption, economic growth, population growth rate, and FDI inflows exhibit adverse environmental consequences by boosting the CO2 emission figures of the selected developing BRI member nations. However, it is interesting to observe that exploiting renewable energy sources, which are relatively cleaner compared to the traditionally-consumed fossil fuels, and fostering agricultural sector development can significantly improve environmental well-being by curbing the emission levels further. On the other hand, financial development is found to be ineffective in explaining the variations in the CO2 emission figures of the selected countries. Besides, the causality analysis shows that higher energy consumption, FDI inflows, and agricultural development cause environmental pollution by boosting CO2 emissions. However, economic growth, technology development, financial progress, and renewable energy consumption are evidenced to exhibit bidirectional causal associations with CO2 emissions. In line with these findings, several relevant policies can be recommended for the BRI to be environmentally sustainable.