Economic Growth and Environmental Sustainability in Russia

Purpose: This study rigorously analyzes the relationship between economic growth and environmental sustainability in Russia, with a particular focus on the Environmental Kuznets Curve (EKC) hypothesis and the decoupling of economic development from CO₂ emissions. The primary objective is to assess how key macroeconomic variables—GDP growth, trade openness, energy composition (renewable vs. fossil fuels), inflation, population growth and coal rents—affect CO₂ emissions from 1996 to 2022. Design/Methodology/Approach: Using econometric models such as OLS, ARDL, and ROLS and the results confirm that GDP growth, inflation, and coal rents have a statistically significant positive effect on CO₂ emissions, indicating a rise in emissions as economic output increases. In contrast, renewable energy consumption and trade openness are significantly associated with lower emissions, supporting the decoupling hypothesis. While population growth positively influences emissions, its effect is weaker compared to other variables. Findings: The study finds partial support for the EKC hypothesis, suggesting that without stronger environmental policies, Russia is unlikely to reach the point where economic growth alone reduces emissions. Practical Implications: The findings highlight the need for robust policy measures to promote renewable energy adoption, manage inflationary pressures and improve trade efficiency to decouple growth from environmental degradation. Originality/Value: The significance of this study lies in its contribution to the broader understanding of how emerging economies like Russia can reconcile economic growth with environmental sustainability.