Moving toward sustainable development: The relationship between water productivity, natural resource rent, international trade, and carbon dioxide emissions

This empirical work examines the relationships among energy consumption, real income, and carbon emissions considering the role of water productivity, natural resource rent, and international trade in the global economy from 1990 to 2013. Bayer–Hanck's combined cointegration test confirms the cointegration among variables under consideration in this study. The study also uses auto‐regressive distributive lag approach for long‐term and short‐term estimation. Empirical findings summarize that water productivity, natural resources, and international trade increase carbon emissions level. Two‐way causality is found between water productivity and carbon emissions and between energy consumption and water productivity. These results show that more efficient use of energy and water resources would be an effective strategy to combat global warming.