An Investigation into the Nexus Between Human Development and Carbon Dioxide Emissions: A Global Panel Analysis

A fact is that the environment remains an open-ended topic of paramount importance and interest in the literature. This is also true among decision-makers and the average person on “Main Street.†Another fact is that the momentum of human development is ongoing in most parts of the globe with higher wealth creation capabilities, better education and access to it, and better healthcare, all of which translate into a higher life expectancy. In that global context, it becomes a worthwhile endeavor to empirically assess the relationship between human development and pollution in the form of carbon dioxide emissions. Towards this end, the study considers different statistical and econometric methods involving granger-causality, panel vector error correction, and impulse responses. Using a broad panel of 139 countries sourced from the World Bank Group and United Nations Development Programme (UNDP) over the 1995-2018 period, results indicate some key takeaways and a material policy implication. Improvements in human development exacerbate pollution in the short run. However, in the long run, pollution is contained, even lessened, with improvements in human development. This latter outcome could be due to a growing class of environmentally conscious economic agents and decision-makers over time as economies mature. Such results should not constitute grounds for the pursuit of unchecked and incautious policies. To the contrary, all stakeholders should redouble their efforts in either devising or scrupulously implementing greener policies.