Globalization, Green Finance, and the Environmental Kuznets Curve in Resource-Rich Economies

This study investigates the dynamic relationship between economic growth and environmental quality in Arctic economies, focusing on the roles of financial development, energy consumption, natural resource rents, and globalization. Using panel data and System GMM estimation, the results reveal that financial development (β = 0.024, p < 0.05) and globalization (β = 0.031, p < 0.05) significantly promote economic growth, while energy consumption increases both growth (β = 0.009, p < 0.10) and environmental degradation (β = 0.062, p < 0.01). Natural resource rents are found to significantly worsen environmental quality (β = 0.023, p < 0.05) without contributing to growth. The findings also confirm the Environmental Kuznets Curve (EKC) hypothesis, with a negative and significant squared income term (β = -0.0005, p < 0.05), indicating an inverted U-shaped relationship between income and emissions. Robustness checks using 2SLS estimation validate the consistency of the results. The study concludes that while economic growth is essential, it must be pursued alongside policies that promote sustainable energy use, green finance, and effective resource management.