Oil revenue and production cost disconnect and its impact on the environment: Economic globalization in Asia-Pacific economic cooperation countries

Abstract

The global economy relies heavily on oil production, but it is not without challenges. During the period of economic globalization, the revenue and costs associated with oil production have become disjointed, which has had a detrimental effect on the environment. As a result, environmental protection has been compromised, environmental regulations have been weakened, natural resources have been exploited, and climate change has been exacerbated. This study examines the impact of revenue minus the production cost of oil, energy use, and shadow economy on environmental degradation in APEC countries from 1991 to 2020, using the economic globalization index as a moderating variable. The result explains that revenue minus the oil production cost and the shadow economy are negatively associated with environmental degradation. Energy use and economic globalization are positively associated with environmental degradation in APEC countries. Revenue minus the production cost of oil and shadow economy improve the environment. Energy use and economic globalization degrade the environment in APEC countries. Policymakers are encouraged to advance technologies and upgrade infrastructure to reduce greenhouse gas emissions; also, promoting energy-efficient practices in other sectors, like transportation and manufacturing, could contribute to a healthier environment.

Keywords

Greenhouse gas emissions / Revenue minus production cost of oil / Economic globalization / Shadow economy / APEC countries

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