Green road to Sustainability: Impact of Urbanization on Environmental Degradation with Infrastructure Investment as Moderator in Belt and Road Initiative Economies

Abstract

This study investigates the effect of urbanization on environmental degradation in economies along the Belt and Road Initiative. Using panel data from 64 BRI countries from 2013 to 2021, the study employs GMM and 2SLS techniques to investigate the linkage between urbanization, infrastructure investment, and environmental degradation. The study found that infrastructure investment has a negative impact on environmental degradation, while urbanization has a significant positive impact on carbon dioxide emissions and rates of deforestation. Furthermore, the study reveals that in BRI economies, infrastructure investment moderates the relationship between urbanization and environmental degradation. This highlights the importance of policies that encourage sustainable development as well as institutions that can efficiently manage the negative effects of urbanization. Policymakers are encouraged by these findings to establish a balance between economic growth and protecting the environment, promote sustainable practices, and promote renewable energy sources. This study closes the knowledge gap on the effects of urbanization on the environment in BRI economies, which promotes the discussion on sustainable development. More research with more participants and a longer period can build on these findings to provide a more thorough understanding of the linkage between environmental deterioration and urbanization in BRI countries.