The importance of settling geopolitical disputes in neutralizing the carbon curse of natural resources: evidence from South and Southeast Asia

Although natural resources are crucial inputs for fostering economic growth, the environmental curse of natural resources cannot be overlooked. Notably, utilization of unclean natural resources often has risks of triggering higher carbon emissions; thus, making economic outputs more carbon-intensive and carbon sequestration more difficult. Hence, considering the importance of geopolitical dispute settlement to gradually reduce natural resources reliance and thereby de-curse the environment, this study chose nine South and Southeast Asian nations to examine whether developing sound geopolitical relationships can help to reduce the carbon curse of natural resources. Considering data from 1984 to 2018 for analytical purposes, it is found that natural resource utilization, especially coal, oil, and forest resources, worsens the carbon curse situation, especially in Southeast Asian countries. On the other hand, settling geopolitical disputes is identified as a potential means for reducing the carbon curse for both South and Southeast Asian countries. Moreover, simultaneously resolving geopolitical issues and utilizing more natural resources are found to jointly de-curse the carbon curse. Notably, the results confirm the role of geopolitical dispute settlement as a moderator which partially lessens the carbon curse associated with more use of natural resources. However, such joint de-cursing impacts are heterogeneous across different types of natural resources. Nevertheless, the results collectively endorse that settlement of geopolitical disputes helps to reduce carbon emissions, thus, making economic outputs across South and Southeast Asia less carbon-intensive. Accordingly, relevant geopolitical relationship-building policies are recommended for low-carbon transformation of natural resource-based sectors in South and Southeast Asia.