The Mediating Role of Globalization in the Nexus Between CO₂ Emissions, GHGs, and Economic Growth
DOI:
https://doi.org/10.47654/v30y2026i2p230-257Keywords:
CO₂ emissions, Greenhouse gas emissions, Globalization, Economic growth, G20Abstract
Purpose - This study investigates the mediating role of globalization in the relationship between carbon dioxide (CO₂) emissions, greenhouse gas (GHG) emissions, and economic growth in G20 countries. It seeks to determine whether globalization can transform environmental pressures into drivers of sustainable economic performance.
Design/methodology/approach - The analysis relies on balanced panel data from 20 G20 countries covering the period 2010–2024. Advanced panel econometric techniques are employed to estimate direct and indirect (mediating) effects, while controlling for cross-country heterogeneity and time-specific effects.
Findings - The empirical results reveal that CO₂ and GHG emissions exert a negative but statistically insignificant direct effect on economic growth. However, globalization has a positive and significant impact on growth and fully mediates the relationship between emissions and economic performance. Specifically, higher levels of globalization reduce the adverse growth effects of emissions by facilitating technology transfer, cleaner production processes, and access to environmentally efficient markets.
Research limitations/implications - The study is limited to G20 economies and does not account for country-specific environmental regulations or sectoral emission structures, which may influence the magnitude of the effects.
Practical implications - Policymakers should integrate globalization-oriented strategies with environmental policies to enhance green technology diffusion and sustain long-term economic growth.
Originality/value - This study is among the first to empirically demonstrate the mediating role of globalization in the emissions–growth nexus within G20 countries over a recent and extended period, offering a dynamic perspective absent from prior studies.
From a Decision Sciences perspective, this study provides analytical evidence that supports strategic policymaking by helping decision-makers evaluate trade-offs between economic growth and environmental sustainability under conditions of global interdependence and uncertainty.
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