Exploring the critical nexus among energy mineral, globalization, and CO2 emissions in NAFTA: What's the forum's response amid asymmetries?

With the recent implementation of the United States-Mexico-Canada Agreement (USMCA) and its stringent environmental regulations, interest is growing in comprehending the intricate relationship between economic growth, energy minerals, globalization, and carbon dioxide (CO2) emissions within the NAFTA bloc. This study reexamines the environmental Kuznets curve (EKC) hypothesis, focusing on the economies of Canada, Mexico, and the United States concerning energy minerals (such as natural gas), globalization, and CO2 emissions. To analyze this relationship, the Quantile Autoregressive Lag (QARDL) method is employed from 1990Q1 to 2018Q4. The findings justify the EKC hypothesis from lower to middle quantiles in the case of the Canadian economy. However, in the case of Mexico and the USA, the EKC hypothesis is valid from median to higher quantiles. For the Canadian case, the coefficients of natural gas are positive and significant from lower to median quantiles, indicating that energy minerals are positively linked to CO2 emissions in Canada. The positive nexus between energy minerals and carbon footprint is validated from lower to higher quantiles in the Mexican economy, whereas for the USA case, the positive association only holds in the median quantiles. Moreover, globalization significantly increases environmental degradation in Canada and the USA, while it is insignificant in Mexico. Overall, our findings unveil the existing asymmetries in the association between the designated variables and stress how heterogeneities can be a critical factor in environmental research, indicating the need for sustainable climate models based on reliable forecasting.