Determinants of CO₂ Emissions in the Balkans, Black Sea, and Caucasus Region: Evidence from Panel ARDL–PMG and DCCE Models

This study examines the determinants of carbon dioxide (CO₂) emissions in 12 countries from the Balkans, Black Sea, and Caucasus region over the period 1990–2024. It extends the literature by including freshwater withdrawal and aquaculture production as explanatory variables. The study also controls for GDP, population density, and electricity consumption as additional covariates. In doing so, the study proposes resource related determinants of on environmental pressure. The analysis uses annual panel data from the World Development Indicators database of the World Bank. To account for cross-sectional dependence and mixed orders of integration, the study applies a panel ARDL–PMG model. The Dynamic Common Correlated Effects(DCCE) estimator is also used as a robustness check. The results show that population density, electricity consumption, and freshwater withdrawal increase CO₂ emissions in the long run. In the short run, GDP and electricity consumption have positive and statistically significant effects on emissions. The DCCE estimates also show the positive effect of electricity consumption and a weaker positive effect of population density. They indicate a positive association between aquaculture production and emissions. In both estimation, the Environmental Kuznets Curve hypothesis is not supported. Overall, the findings suggest that environmental pressure is linked to energy use, population density, and resource usage in the sampled countries. Overall, the results indicate a need for greater emphasis on renewable energy, sustainable urban planning, better water management, and more environmentally friendly aquaculture practices.