More than the resource curse: Exploring the nexus of natural resource abundance and environmental quality in northwestern China

Abstract The recent worldwide shift towards sustainable development has led to substantial focus on environmental issues due to energy consumption. Although the existing literature on energy, development and environment is rich, only a handful of studies have investigated the impact of resource abundance on environmental pollution. Therefore, this study examines the association of natural resources and environmental quality in five northwestern provinces of China using annual data form 1995 to 2017. The structural break test confirms that variables are stationary with a mixed trend for all provinces. The results of fully modified ordinary least squared test vary among provinces stating that resources are associated with environmental pollution in four provinces; this deteriorating impact is more significant in Xinjiang and Shaanxi as compared to Gansu and Ningxia. However, the results for Qinghai province indicate that natural resource availability improves environmental quality and reduces CO2 emissions; nonrenewable energy and economic development deteriorate the environment in this province. Nevertheless, renewable energy sources outweigh the nonrenewable energy in terms of environmental sustainability and promote green development in northwestern China; furthermore, our estimations do not confirm the environmental Kuznets curve hypothesis in all provinces. The robustness check confirms a long term connection for all variables and the causality analysis show diverse results for the selected provinces. The study provides important policy implications about research and development and the role of China's central government to promote sustainable development.