Escaping the carbon curse: the roles of technological innovation, green growth and green finance in resource-rich economies

Resource-rich economies often face the carbon curse, where heavy reliance on natural resources leads to higher emissions and slower environmental progress. Policy tools such as technological innovation, green growth, and green finance are widely promoted to address these challenges. However, their effectiveness varies, and linear models may overlook important threshold effects, where these tools only work after reaching critical levels of development or investment. This study interrogates the existing evidence and offers some masterpiece pathways for escaping the carbon curse of natural resources. Using a dataset from 2000–2023 and Hansen (1999) threshold model, the findings are as follows: The linear model shows that technological innovation and green finance are positively associated with carbon emissions and energy intensity. Green growth appears more beneficial, showing negative effects on emissions across models. However, threshold analysis reveals that all three policy instruments – technological innovation, green growth, and green finance – only yield significant environmental benefits above specific critical levels. Below these thresholds, their impact is either negligible or harmful, reinforcing the idea that policy maturity and scale are essential. These findings highlight the need for resource-rich countries to exceed key policy and investment thresholds to achieve effective decarbonization. A targeted approach to scaling innovation, strengthening green growth frameworks, and strategically allocating green finance is crucial to escaping the environmental traps of resource dependence.