Human Capital and Carbon Emissions: The Way forward Reducing Environmental Degradation

Abstract

Many environmental problems are human induced, one of which is the change in atmospheric composition, a hot research topic in recent decades. This study aims to investigate the impact of human capital (HC) on carbon dioxide (CO2) emissions in Sri Lanka using time series annual data from 1978 to 2019. The time series data were examined for a unit root problem and an unknown structural break. An autoregressive distributed lag (ARDL) approach was employed to identify the long-run relationship between HC and CO2. The results confirm the long-term relationship between carbon emissions and human capital. As a unique finding of this research, the estimated coefficient of human capital to carbon emission is negative and statically significant, suggesting that a 1 percent increase in HC decreases carbon emissions by 1.627789 percent. The significance of this finding is that it can help achieve Sustainable Development Goal “13”, which focuses on combating climate change and its effects. The study indicated that building in HC by investing more in education helps to reduce carbon emissions in the long term. It reflects that human capital accumulation is linked to reduced environmental degradation due to lower CO2 emissions.

What we learn from nexus between greener growth and energy‐related emissions: Sustainability perspective evidence in context of financial globalization

“…In the literature, human capital is widely used as a responsible factor of economic and environmental performance (Rahim et al, 2021) (Adikari et al, 2023;Dong et al, 2023;Wang, Rehman, et al, 2023;Wang, Zhang, & Li, 2023), particularly in the presence of strong institutional quality.…”

“…Therefore, depending on which pathways are dominant, the overall impact of human capital on the environment can alter. In the latest research, several scholars have validated the adverse influence of human capital on the increased emissions, where the higher level of human capital is substantial in reducing the level of emissions and environmental deterioration (Adikari et al, 2023; Dong et al, 2023; Wang, Rehman, et al, 2023; Wang, Zhang, & Li, 2023), particularly in the presence of strong institutional quality.…”

Nexus between financial development and carbon emission in Bangladesh: Evidence from ARLD and NARD

“…There are several reasons why FDI may lead to increased environmental degradation. First, FDI often leads to the introduction new technologies and production processes that are more energy-intensive and polluting than those used in the host country (95)(96)(97). Second, FDI may lead to the exploitation of natural resources that would otherwise be left untouched.…”

Nexus between financial developments, renewable energy consumption and environmental sustainability in Bangladesh: Evidence from ARDL and NARDL

“…The environment may suffer as a result of FDI for several different reasons. To begin, foreign direct investment (FDI) often results in adopting manufacturing methods and technologies that are more resource-intensive and polluting than those already used in the nation of origin (120)(121)(122). Second, foreign direct investment (FDI) might cause the exploitation of otherwise untapped natural resources.…”