Impact of energy depletion, human development, and income distribution on natural resource sustainability

Abstract

Constant exploitation of natural resources has resulted from the industrialization and urbanization of society. One of the possible causes of the COVID-19 pandemic is an ecological disturbance caused by excessive resource exploitation. Countries worldwide have taken precautionary measures to limit the spread of this disease because of its highly infectious nature: lockdowns, quarantines, curfews, etc. This paper explores the impacts of energy depletion and the human development index on natural resources, considering the roles of CO₂ emissions and economic growth in China from 1971 to 2019. We apply advanced economic modeling using the Phillips-Ouliaris test for integration, Gaussian identity mixed-effects Generalized Linear Model, and Robust GEE population-averaged model for long-run estimates. Results explain that CO₂ emissions and economic growth devalue natural resources, while the human development index and energy depletion increase them. Depletion of natural resources occurs due to overexploitation and overuse of natural resources, as well as unsustainable planning and waste. In the case of natural resources that man uses to make other resources, such as dams, roads, sports complexes, etc., these are considered human-made resources. It is, therefore, essential to develop human resources as a part of the natural resource development process. Research limitations and future directions are discussed.

1. Introduction

There has been an enormous economic and social impact of COVID-19 worldwide. While it is widely acknowledged that restrictions on movement are direct consequences of regional government policies, no in-depth exploration of the relationship between natural resources and precursors, the infection spread, and disease effects has yet been conducted. The COVID-19 pandemic and natural resources have many interactions (Pak et al., 2020).

Food, clean water, biodiversity, and electricity are among these resources, and they are also affected by their effects, such as fuel consumption and mining. Access to drinking water and power sources, including electricity, guarantees water supply. This is because hand washing is one of the most effective ways to prevent the spread of disease. Additionally, non-renewable natural resources contribute strongly to macroeconomic growth, making homes inhabitable and operationalizing hospitals (United Nations, 2020a).

As a result of lockdown measures, fuel use, emissions, and mining of those resources have been temporarily and steadily decreasing. Despite overcrowding and close connectivity between people within social structures, COVID-19 can be transmitted from animals to humans, making it a zoonotic disease. As ecosystems capable of controlling the spread of diseases continue to be fragmented, degraded, and destroyed, one of the problems with zoonotic diseases has received relatively little attention (United Nations, 2020a). These are the five leading factors of global climate change: land-use changes; fragmentation of ecosystems; changes in the food industry; and human susceptibility to climate change. The population of those species that act as primary reservoirs of viruses is regulated by species diversity, a characteristic of healthy ecosystems. It prevents the transmission of pathogens. Direct and indirect protection of human health requires the conservation of biodiversity and its ecosystem services (Muche et al., 2022).

Natural resources and the most vulnerable social sectors in the region have been adversely affected by measures to halt the spread of COVID-19. World prices for fossil fuels, minerals, agricultural exports, and livestock exports have fallen; energy demand has declined; corporate profits have declined; tax revenues have decreased; and currencies have weakened in the region (Mensah, 2019). This undermines efforts to address the pandemic and its economic and social effects, hampering the government's ability to manage economies. Moreover, the disease continues to spread in the region, increasing poverty and extreme poverty as the number of people infected by the disease rises without a clear indication of when it will peak (Jackson, 2020).

The above impacts hinder achieving the Sustainable Development Goals (SDGs) by 2030. To achieve the SDGs related to natural resource management, it is necessary to ensure long-term economic recovery. This includes SDG-6, which makes water and sanitation available to all and ensures that they are managed sustainably; Goal 7 aims to provide everyone with accessible, reliable, sustainable, and modern energy; In addition to ending hunger, improving nutrition, and promoting sustainable agriculture, SDG-2 aims to end poverty (United Nations, 2020b); to reach SDG-14, oceans, seas, and marine resources must be conserved and sustainably used for sustainable development; meeting SDG-15 involves preventing, reversing, and restoring terrestrial ecosystems, managing forests sustainably, combating desertification, and halting biodiversity loss (United Nations Environment Programme, 2015). Post-pandemic recovery's main focus must be to reduce social and environmental vulnerabilities in the medium and long term to prevent future complex scenarios from having as severe an impact (Mensah, 2019).

The importance of mineral resources to global productivity cannot be overstated. To decarbonize natural resources, the industry optimizes extraction, develops cleaner energy technologies, and regulates the environment. In addition to negatively impacting mineral resource rents, the COVID-19 pandemic also negatively impacts socio-economic and environmental resources (International Energy Agency, 2022). It affects not only the economy but also the livelihoods of ordinary people who work in this sector due to the depletion of mineral resources. Additionally, pollution costs negatively affect general health, resulting in more likely cases of contagious diseases due to a weakened immune system (International Energy Agency, 2021).

A 20%–55% decrease in commodity prices is attributed to the COVID-19 pandemic. In addition to thermal coal, metallurgical coal, gold, and iron ore all dropped, with thermal coal falling 23%, 21%, 19%, and 18%, respectively. Large mining countries devalued their currencies by 10–30% (International Energy Agency, 2019). As a result of high healthcare expenditures, closure of essential markets, strict lockdown, exacerbated unemployment, financial issues, and disruption of the global food supply chain caused by the COVID-19 pandemic, a great deal of research confirms that poverty risk increases globally. By reducing COVID-19 cases globally, global strategic policies can reduce the economic and environmental impacts of the disease (IRENA, 2020).

As a result of the Covid-19 pandemic, investments are slowed, and clean energy technologies are at risk of slowing down. As a result of the pandemic, travel, trade, and economic activity will be disrupted this year, causing a worldwide decline in carbon emissions. In any case, it doesn't constitute a cause for celebration, as it follows a global health crisis and widespread economic hardship. We must pay close attention to what happens next regarding our energy future. It will be necessary for governments to take a leadership role in pursuing structural reductions in emissions by implementing intelligent, sustained, ambitious policies. These should accelerate the development and deploy a full range of clean energy solutions. This is to achieve a robust economic recovery without the same rebound in emissions as the 2008 global financial crisis (Sadorsky, 2009).

In addition to constraining social, economic, and mobility activities, the pandemic has significantly affected energy use. 2020 is expected to be the most significant drop in energy demand in more than 70 years, with demand declining by 6%. 2020 is expected to mark the lowest level of CO₂ emissions since 2010. Due to a global health crisis, soaring unemployment, and massive economic hardship, this drop in emissions is not caused for celebration. In 2019, despite the robust economic growth, CO₂ emissions still fell short of the 6% reduction needed each year (Li et al., 2020).

The Covid-19 crisis has proven to be resilient to renewable energy sources. Over the same period in 2019, renewables contributed more than 26% of global electricity to the grid. This resilience, however, is not expected to remain in place in 2020, when renewables’ growth is expected to moderate. Globally, renewable power capacity is expected to grow only 13% to 167 GW (GW) (International Atomic Energy Agency, 2020). Various factors have contributed to this decline, including supply chain disruptions, lockdown measures, social distancing guidelines, and financing challenges. Without strong government support, rooftop solar PV installations may decline in the medium term. Most utility-scale projects are projected to be completed by 2021 (Relva et al., 2021).

Renewable energy has been less resilient than electricity. In 2020, the production of transport biofuels was expected to shrink by 13% - the first decline in 20 years. The industrial sector will also experience a reduction in the use of renewable heat in 2020 as a result of reduced activity. Biofuels and renewable heat technologies are becoming less competitive due to low oil and gas prices. As part of stimulus packages to reinvigorate their economies, governments have a unique opportunity to accelerate clean energy transitions. In addition to stimulating economic development and job creation, renewable energy investments reduce emissions and foster innovation (European Environment Agency, 2021).

This study examines the impact of energy depletion on natural resources as the first important question. A natural resource is depleted when it is consumed faster than it is replaced. There are two types of natural resources: renewable and non-renewable. Natural resources exist without human intervention. Depletion of natural resources refers to the usage of water, farming, fossil fuels, fishing, and mining when it comes to the discussion of these things. In addition, the depletion of natural resources is defined according to their natural availability, which determines their value. There is also an important question addressed in this study regarding how human development affects natural resources. Having an abundance of natural resources makes it easier for a country to develop than one that doesn't have many. Natural resources positively contribute to economic development. Resources contribute to economic growth by boosting output, but depletion accelerates, and output increases as natural resources are used more intensively.

Additionally, this study examines how CO₂ emissions affect natural resources in China. Several factors produce atmospheric carbon dioxide, including ocean outgassing, vegetation decomposition, volcano venting, natural wildfires, and animal belching. In mining and agriculture's most comprehensive environmental assessment, extractive industries are responsible for half of the global carbon emissions. There has been a three-fold increase in resource extraction since 1970 despite a doubled population. It aims to maximize agricultural productivity while protecting the environment by valuing natural resources.

Several aspects of this study contribute to the advanced literature on natural resource policy. When resources are consumed faster than they can be replenished, they are depleted. In natural resources, renewable resources and non-renewable resources are usually distinguished. Resource depletion is considered when each of these forms of resource is used beyond its replacement rate. Although many studies have been conducted on the effect of renewable and non-renewable energy sources, we have not found any studies exploring their depletion's effect on natural resources. To our knowledge, this is the first study to examine energy depletion's effect on natural resources. Resource depletion occurs when non-renewable or renewable resources are consumed faster than their replenishment rate. Fossils, water, fish, mining, logging, fishing, and mining are all examples of resource deletion. The development of human beings and the availability of natural resources have been interconnected since long before human history. Currently, there is a lack of attention paid to this aspect of the literature. Natural resources are examined in this study concerning the Human Development Index. A country with many natural resources can develop much more quickly than one with few. Economic development and natural resources go hand in hand. Taking into account the effect of CO₂ emissions and economic growth on the natural resource equation in which the SDGs of the United Nations have a deterministic characteristic, we incorporated these metrics. Natural resource policies provide the foundation for sustainable resource use, management, and protection. A link was established between COVID-19 and natural resource policy. In Natural Resource Policy, we combine policy processes, history, institutions, and current events to analyze how natural resources can be managed sustainably in the future. We apply advanced economic modeling using the Phillips-Ouliaris test for integration, Gaussian identity mixed-effects Generalized Linear Model, and Robust GEE population-averaged model for long-run estimates.

Following is a summary of the remainder of this paper. In section 2, we briefly discuss the literature review. Section 3 discusses modeling, data, and methodology. Section 4 presents the results and discussions. Section 5 contains conclusions and policy implications.

2. Literature and concept

The relationship between natural resources, energy use, trade openness, industrialization, economic growth, and urbanization has been extensively studied in recent years. Studies (Arslan et al., 2022; Azam et al., 2022; Cai et al., 2022; Jie et al., 2023; Khan et al., 2021b, 2021c, 2022a, 2022c; Liu et al., 2022c, 2022a; Tawiah et al., 2021; Yang and Khan, 2022; Zahoor et al., 2022b; Y. C. Zhang et al., 2022) have investigated the interrelationship between natural resource depletion and environmental and economic variables, as well as the consumption of energy. Using a panel study for five European Union (EU-5) countries, Balsalobre-Lorente et al. (2018) posit that renewable energy consumption, economic growth, and natural resources all contribute to emissions of greenhouse gases. The study concluded that there was an offset to the degradation of the environment due to abundant natural resources, renewable energy, and energy innovation. Other studies have examined the effects of natural resource extraction activities on the environment at the regional and country levels. As a result of their study, Dogan and Aslan (2017) examined the relationship between real income, non-renewable and renewable energy consumption, and the openness of trade concerning pollutant emissions. Compared with non-renewable energy, trade liberalization and producing electricity by renewable resources hurt carbon emissions (Ahmad et al., 2022; Khan et al., 2021e, 2022b; Khan and Hou, 2021a; Liu et al., 2022b, 2023). According to the results of this study, pollutant emissions and renewable energy consumption are bi-directionally causal, and real income is uni-directionally causally related to pollutant emissions, non-renewable energy to pollutant emissions, and liberalization of trade to pollutant emissions (Hassan et al., 2022; Khan et al., 2021a, 2021f; Khan and Hou, 2021b; Zakari and Khan, 2022).

The concept of depletion accounting was developed to mitigate the depletion of resources. In depletion accounting, nature and the market economy are equally valuable (Awan et al., 2022; Khan and Hou, 2021c; Zahoor et al., 2022a). To estimate the adjustments necessary due to the depletion and use of natural capital, resource depletion accounting uses data provided by countries. Mineral deposits or timber stocks are examples of natural capital. As a result, depletion accounting considers several factors, such as how many years until resource exhaustion, how much it costs to extract the resource, and how much it is demanded. Developing countries primarily depend on resource-extraction industries for economic growth (Ali et al., 2022; Khan et al., 2021d). Development countries, therefore, suffer from greater depletion of resources and environmental degradation. There is an argument that developing countries should implement resource depletion accounting. Ecosystems and natural resources are also measured in terms of depletion accounting. The role of ecosystem services in measuring social value can be understood as households, communities, and economies benefiting from nature (Lyu et al., 2022; Zakari et al., 2022; C. Y. Zhang et al., 2022).

In contrast to cars, houses, and bread, nature is more difficult to quantify for depletion accounting. To maintain the viability of natural resources in the market economy, depletion accounting must establish appropriate units of natural resources (Otto von Troschke, 2015). When trying to do so, the main challenges are selecting the appropriate unit of account, deciding how to deal with a complete ecosystem as a collective, defining the borderline between ecosystems, and determining how much duplication is possible when resources interact with multiple ecosystems (Freedman, 2018). Currently, there are no market indicators that measure the value of public goods provided by nature, which is one of the reasons why some economists would like to include a measurement of the benefits arising from nature's public goods. Environmental economics has not measured nature's services consistently across the globe (Ghermandi et al., 2012).

Since the early 1970s, agricultural policies in developed countries have mainly focused on increasing farming productivity, income, commodity prices, agricultural trade, and rural economic vitality (Production et al., 2014). A general lack of recognition or consideration of environmental externalities associated with agricultural production exists. Natural resource policies relating directly to agriculture protected and facilitated land and water resources essential to agriculture. Arid West agriculture was made possible, for example, in the United States in the first half of the 20th century by dams and irrigation systems developed by the federal government (Zafar et al., 2019).

The United States established it in the 1930s to protect agricultural productivity and sustain rural economies that depended heavily on agriculture. The National Resource Conservation Service (now the Soil Conservation Service) administers soil and water conservation programs (Blandford et al., 2014). Due to the conversion of native grasslands into croplands during the 1930s, large dust storms were caused by soils disturbed by these programs. Several of the inputs and activities now regarded as key determinants of agro-environmental externalities were the targets of policies but served other purposes. The Federal Insecticide Act of 1910 introduced national insecticide regulation programs to protect farmers from insecticide supply chain fraud (Ellinger and Penson, 2014).

From agricultural production to environmental protection, agricultural resource and environmental policies have evolved significantly since the late 1960s. The environment became a major public policy issue in the 1960s, and agricultural practices were identified as posing significant environmental risks (Rausser and Zilberman, 2014). A plentiful food supply, the decline in the importance of agriculture as a source of employment and income in many countries, and agricultural practices recognized for their environmental impact. Environmental protection initiatives were initiated due to the harm caused by pesticides to fish, wildlife, and humans (Norton, 2014). According to the 1972 Federal Environmental Pesticide Control Act, which replaced the 1910 Federal Insecticide Act, pesticide regulation focuses mainly on protecting the environment and public health. It is overseen by the newly created US Environmental Protection Agency, which replaced the US Department of Agriculture (EPA, 2014).

There has been a growing recognition in agricultural regions of Europe and North America that fertilizers, pesticides, animal wastes, and eroded soils contribute to water pollution, leading to initiatives to protect water quality. Federal agricultural conservation programs have dispensed with traditional soil and water conservation objectives by emphasizing water quality and other environmental concerns (Halkos and Paizanos, 2013). In addition to recognizing the environmental benefits of resource-oriented policies, agricultural policies have become more eco-friendly. Agricultural land in Europe and North America is protected from urban development to conserve cultural resources and rural amenities. Some traditional agricultural policies are being rethought in light of the elevated role played by the environment in current agricultural policy since some are regarded as contributing to environmental degradation and inefficient resource utilization (EPA, 2020).

With the advancement of environmental science since the 1960s, a novel ecological paradigm has been developed to conceptualize these relationships in terms of land use, landscapes, ecosystem products, productivity, and human well-being (US EPA, 2021). A paradigm introduced in the 1990s considers ecosystem services produced by both managed and unmanaged ecosystems. The ecosystem provides people with various benefits. Service categories include provisioning, regulating, land degradation, disease regulation, supporting, soil formation and nutrient cycling, recreation, aesthetics, and nonmaterial benefits. In addition, providing services such as food, fiber, fuel, and water (Pata, 2021).

Agriculture is performed within agro-ecosystems, comprising flora, fauna, soils, water, and the atmosphere. In these ecosystems, crops, pasture, livestock, and other flora and fauna interact on the land and beyond, affecting other ecosystems (Chopra et al., 2022; US Environmental Protection Agency, 2012). They interact with uncultivated land, drainage networks, and wildlife, all part of the larger landscapes in which these agro-ecosystems reside. Agriculture often profoundly impacts the surrounding landscape, reflected in the emergence of agro-ecosystems as a typology. Food, fiber, and energy products from agricultural enterprises are considered provisioning services within the taxonomy of ecosystem services (Food, 2022).

In line with expectations, higher energy consumption degrades the quality of the environment significantly (Chu et al., 2022). Safe and healthy living in a household requires affordable energy. While efforts are being made to make energy more affordable and accessible, energy poverty remains acute across the globe (Dogan et al., 2022). Due to the importance of structural transformation to countries' growth activities, numerous reforms are required in various areas to increase production patterns that are more technologically intensive, efficient, and information-intensive (Ghosh et al., 2022). As part of the Chinese government's fight against environmental pollution and climate change, fiscal policy, including fiscal revenue and expenditure, plays an important role (Lv et al., 2022). COVID-19 will result in high energy demand and environmental consequences as the world economy transforms rapidly (Doğan et al., 2022). Despite extensive investigation, the empirical evidence and theoretical points of view remain at odds regarding economic growth and energy consumption. Therefore, achieving greater economic growth and development must be balanced to cut emissions under COP21 (Buhari et al., 2020). To achieve sustainability, renewable energy sources need to be developed. It was unanimously agreed that all countries would implement greenhouse gas reduction measures. In addition, clean energy adoption has been emphasized for environmental welfare. Climate change needs to be addressed by the energy sector (Chu et al., 2023).

3. Research methodology

3.1. Theoretical background

This paper examines how CO₂ emissions and economic growth impact natural resources in China, considering their roles in energy depletion and human development. Natural resources are depleted when they are destroyed or used more quickly than they can be replenished. This depletion rate also affects non-renewable resources, which are becoming scarce. Undoubtedly, depletion signifies the degradation of natural resources, and we must preserve these resources. Without sufficient raw materials, even for survival, the day is nearer when we will no longer have access to them. In terms of natural resources, we can categorize them either as renewable or non-renewable. Natural resources, such as minerals, water, and fossil fuels, disappear quickly; how can we prevent these resources from depleting? Natural resources are depleted primarily due to pollution. Contamination of air and water is the most dangerous consequence compared to decades ago. Pollution is not the only contamination that causes soil, noise, and radiation. There is a more excellent value to a natural resource in short supply because of its depletion than if it is abundant due to global population growth. Therefore, the earth cannot sustainably provide each individual with enough resources to meet their consumption level due to its eco-footprint, four and a half times the global eco-footprint.

A sink offsets natural sources of carbon dioxide, such as the photosynthesis of plants on land and in the ocean, the absorption of carbon dioxide into the sea, and the formation of soil and peat. Carbon dioxide is produced naturally by several processes, including ocean outgassing, the decomposition of vegetation, volcanic eruptions, wildfires, and even the belching of ruminant animals. The oceans contribute the most among all-natural or anthropogenic sources of CO₂ emissions. CO₂ emissions are produced naturally through animal and plant respiration, organic decomposition, forest fires, and volcanoes. Due to human activity, carbon dioxide is being injected into the atmosphere much faster than natural sinks are removing it. Over the past 300 years, we have returned to the atmosphere millions of years’ worth of carbon that plants have absorbed by burning fossil fuels. Global emissions are primarily caused by electricity and heat production. The most significant industries are transportation, manufacturing, and construction, especially cement and agriculture.

An economy dependent on natural resources will suffer in the long run. The paradox of plenty, also known as the resource curse, is an example of such a phenomenon. In scientific circles, it is still widely debated how natural resources affect economic progress. The political regime closely links economic development and the use of natural resources. Several resource-rich nations are negatively affected by their dependency on natural resources, and their average growth rate is lower than in countries with poor natural resources. The resource-rich governments could, however, better administer their resources if they created strong regulatory institutions and invested more in education. Many nations rely heavily on natural resources in their economies but do not take enough time or effort to manage them socially, environmentally, and economically. Scarcity and the importance of natural resources to the modern economy often influence the value of natural resources. Achieving company success and avoiding overexploitation is essential in today's consumer-oriented globalization era. States with abundant resources differ significantly from those without them regarding economic development. Despite the lack of resources, poverty and stagnation are not inevitable.

3.2. Economic modeling and data

This paper explores the impacts of energy depletion and the human development index on natural resources, considering the roles of CO₂ emissions and economic growth in China from 1971 to 2019.

$${NRP}_t={\beta }_0+{\beta }_1{HDI}_t+{\beta }_2{EGD}_t+{\beta }_3{{CO}_2}_t+{\beta }_4{GDP}_t+{\mu }_t$$ (1)

Where ${\beta }_0$ is the intercept, ${\beta }_1\mathrm{t}\mathrm{o}{\beta }_4$ are the coefficients of human development index $\left(HDI\right)$, energy depletion $\left(EGD\right)$, CO₂ emissions $\left(CO2\right)$, and economic growth $\left(GDP\right)$, $t$ is the time series from 1971 to 2019, and $\mu$ is the error. The Human Development Index collects data from the Human Development Index, and energy depletion, CO₂ emissions, economic growth, and natural resources are collected from the World Development Indicators (WDI). The Human Development Index focuses on a healthy, long life, knowledge, and economic well-being as a summary measure of average performance in crucial dimensions of human development. Each of the three dimensions contributes to the geometric mean of the human development index. Life expectancy at birth is used for the health dimension, years of schooling for adults aged 25 and older are used for the education dimension, and years of teaching expected for children until they reach schooling age are used for the education dimension. Gross national income per capita measures the standard of living dimension. The human development index uses the logarithm of payment to reflect the critical importance of income with increasing GNI. A composite index is then produced using geometric means based on the scores from the three HDI dimension indices. There are several ways in which carbon dioxide is made, including gas flares, solid fuels, liquid fuels, and gas fuels. A percentage of GDP is used to calculate the rents from natural resources. Mineral, forest, and oil rents are calculated as a percentage of GDP. The total natural resource rents include rents from minerals, forests, oil, gas, coal, and soft and hard rents. Metric tons are used to measure CO₂ emissions per capita. Among the largest sources of CO₂ emissions are fossil fuel combustion and cement manufacturing. Dollars are used as the unit of measurement for GDP per capita. Divide the midyear population by the gross domestic product to get the GDP per capita. The total economic output includes all taxes and subsidies on products plus any additional value added by residents in the economy. Additionally, it is calculated without deducting depreciation costs associated with manufactured assets and natural resources.

3.3. ADF and DF-GLS unit-root tests

The variable is assessed for its non-stationary nature and unit root structure in a unit root test. Stationary, trend stationary, or explosive roots are the alternative hypotheses depending on the type of test used. Time series are generally assumed to be time series by unit root testing: ${\left[y_t\right]}_{t=1}^T$, as follows:

$$y_t=D_t+z_t+{\epsilon }_t$$ (2)

Where, in a deterministic component, there is a trend, $D_t$ seasonal component, etc. $z_t$ component a represents stochasticity, and an error process with stationary errors is called ${\epsilon }_t$. Testing for unit roots or stationary components is the objective of this test. This study uses Dicky-Fuller's (1997) Augmented Dicky-Fuller (ADF) and DF-GLS unit root tests to identify the unit-roots of the dataset

$${\Delta y}_t=c+{ay}_{t-1}+\sum _{j=1}^k{d}_j{\Delta y}_{t-j}+{\epsilon }_t$$ (3)

$${\Delta y}_t=c+{ay}_{t-1}+{\beta }_t+\sum _{j=1}^k{d}_j{\Delta y}_{t-j}+{\epsilon }_t$$ (4)

Where $c$ is the constant, in terms of time trend, $a$ is the coefficient, and $t-1$ is autoregressive process lag order.

3.4. Zivot-Andrews breakpoints unit-root test

Additionally, Zivot-Andrews (1992) used structural break unit roots in this study. The null hypothesis of Zivot Andrews excludes exogenous structural changes when a unit root process has drifted. When serial correlation and a single structural break are present in a univariate process, Zivot-Andrews can test for a unit root. Rather than performing an auto-lag regression at each candidate break period as per the original paper, a single auto-lag regression is run up-front on the base model constants and trends without dummies. A trending data series is generally considered to respond long-term to a shock to the series. According to formal reasoning, current shocks have only a temporary effect and do not affect the long-term movement of a series. All subsequent break-period regressions are based on this lag length. As a result of this algorithm, run time is significantly reduced, yet test statistics are somewhat more pessimistic than those produced by the original Zivot-Andrews method (Zivot-Andrews, 1992).

3.5. Phillips-Ouliaris cointegration test

Cointegration tests recognize situations where a non-stationary time series cannot deviate from its long-term equilibrium. It is used to determine if there is a long-term correlation between several time series by applying the cointegration test. After British economists Paul Newbold and Granger published the spurious regression concept in 1987, Nobel laureates Robert Engle and Clive Granger introduced the concept. Cointegration tests can identify the situation when two or more non-stationary time series are integrated together to prevent deviating from equilibrium in the long run. This test compares two variables over time to determine how sensitive they are to the same average price. In addition to Engle-Granger, Johansen, and Phillips-Ouliaris, the Engle-Granger test is also a famous cointegration test. The Phillips-Ouliaris cointegration test is used in this study. The tests use Phillips-Ouliaris during a specified time to determine whether two variables are sensitive to the same average price (Ouliaris, 1990).

3.6. Long-run estimates

This study uses a mixed-effects generalized linear model (GLME) using Guasian identity for the long-run estimates. When data distribution differs from usual for the response variable, generalized linear mixed effects describe the relationship between the response variable and the independent variables. The coefficients can vary in response to one or more grouping variables. Fixed-effects and random-effects terms are included in a mixed-effects model. Linear regression models usually include fixed-effects terms. A random-effects time accounts for variations between groups that might affect a response by randomly drawing unit samples from a population. There are prior distributions for random effects but not for fixed effects. Generalized linear mixed-effects models take the following form:

$$y_i|b\sim Distr\left({\mu }_i,\frac{{\sigma }^2}{w_i}\right)$$ (5)

$$g\left(\mu \right)=XB+Zb+\delta$$ (6)

Where.

• $y$ = $n-by-1$ response vector

• $y_i$ = $i$ th element

• $b$ = random effect vector

• $Distr$ = specified conditional distribution of $y$ given $b$.

• $\mu$ = conditional mean of $y$ given $b$, and ${\mu }_i$ is the $i$ th element

• ${\sigma }^2$ = parametic dispersion

• $w$ = weight vector effective observation, and $w_i$ is the weight for observation $i$.

This study also used a generalized estimation equation (GEE) approach for robust analysis. GEEs are commonly used in average population models. The methods are used instead of traditional regression methods since residents’ health may be correlated in their neighborhoods, violating traditional independence assumptions. Neighborhood characteristics and individual-level health outcomes are often estimated using two different modeling approaches in multilevel studies. Maximum likelihood estimation is used in models with random effects or mixed effects.

4. Results and discussion

A descriptive analysis of China's natural resources, human development index, energy depletion, CO₂ emissions, and economic growth is presented in Table 1 . Natural resources and the human development index are negatively correlated. There is a negative correlation between the human development index and energy depletion. There is also a negative correlation between CO₂ emissions and economic growth. CO₂ emissions and the human development index are positively correlated with economic growth. Furthermore, standard deviation values indicate that economic growth is prone to fluctuations.

Table 1.

Descriptive analysis.

Methods	NRP	HDI	EGD	CO2	GDP
NRP	1.000000
HDI	−0.015583	1.000000
EGD	0.153932	−0.012312	1.000000
CO2	−0.022261	0.015920	−0.012967	1.000000
GDP	−0.097450	0.061435	−0.083522	0.090155	1.000000
MEAN	0.628350	0.646867	0.299611	1.559600	2.900430
MED	0.686480	0.635000	0.395954	1.621965	2.785085
MAX	1.283853	0.804000	1.053903	1.730446	4.009308
MIN	−0.088257	0.502000	−1.085927	1.239846	2.074284
STD	0.361929	0.102459	0.455150	0.171597	0.626794
SKE	−0.119224	0.099778	−0.807263	−0.623747	0.476537
KUR	2.154467	1.465944	3.875738	1.880747	1.808483
J-B	1.575724	4.886019	6.887793	5.734980	4.753125
Prob.	0.454816	0.086899	0.031940	0.056841	0.092869
SUM	30.78916	31.69650	14.68093	76.42040	142.1211
SUM-SQ	6.287652	0.503893	9.943736	1.413384	18.85781

Table 2 presents the results of the ADF and DF-GLS unit root tests for natural resources, human development index, energy depletion, CO₂ emissions, and economic growth. According to the results, energy depletion is stationary at both the level and the first difference. At level, it is significant at 10%, and at the first difference, it is effective at 1%. At level, natural resources, human development index, CO₂ emissions, and economic growth do not remain stationary. At a 1% significance level, these variables are stationary and significant at first difference. Zivot-Andews breakpoints unit root test results are shown in Table 3 . Again, the result shows that energy depletion is stationary at level and first difference with structural breaks in 2012 and 1999. Despite this, natural resources, human development index, CO₂ emissions, and economic growth are stationary at first difference. There are seven structural breaks: 2004, 1995, 2012, 2004, 1999, 1986, 2004, and 1994. Generally, all of these variables are mixed-level stationery, which means some are stationary at level, some are stationary at the first difference, but none are stationary at the second difference (see Table 4).

Table 2.

ADF and df-GLS unit-root tests.

Methods/Variables	ADF		DF-GLS
	At-Level	At-First difference	At-Level	At-First difference
NRP	−1.850710	−5.222126***	−1.168833	−5.150619***
HDI	0.045697	−6.886221***	1.965310	−6.214593***
EGD	−3.113638*	−5.167365***	−1.164686	−4.494214***
CO2	−2.331724	−5.987784***	0.394738	−6.012825***
GDP	1.204305	−5.351612***	0.440602	−5.410276***

***,and*show significance at 1%, and10%.

Table 3.

Zivot-andrews breakpoints unit-root test.

Variables	Level	Breakpoint	First Difference	Breakpoint
NRP	−3.831472	2004	−6.473671***	1999
HDI	−3.242105	1995	−7.981695***	1986
EGD	−4.376107**	2012	−6.588443***	1999
CO2	−1.717929	2004	−4.496331**	2004
GDP	−2.840255	2004	−6.543160***	1994

***,and**show significance at 1%, and 5%.

Table 4.

Phillips-ouliaris test for cointegration.

Variables	tau-statistic	Prob.*	z-statistic	Prob.*
NRP*	−3.462461	0.0878	−18.85260	0.0075
HDI	−2.517245	0.8158	−11.13287	0.8370
EGD	−3.909320	0.2124	−20.58447	0.3192
CO2	−2.080643	0.9295	−8.491710	0.9328
GDP	−2.456078	0.8364	−10.70884	0.8555
	NRP	HDI	EGD	CO2	GDP
Rho - 1	−0.329157	−0.222597	−0.373054	−0.175298	−0.204375
Bias corrected Rho - 1 (Rho* - 1)	−0.392762	−0.231935	−0.428843	−0.176911	−0.223101
Rho* S.E.	0.113434	0.092138	0.109698	0.085027	0.090836
Residual variance	0.002871	6.86E-05	0.004742	0.000794	0.004344
Long-run residual variance	0.003615	7.19E-05	0.005877	0.000802	0.004798
Long-run residual auto covariance	0.000372	1.65E-06	0.000568	3.72E-06	0.000227
Bandwidth	NA	NA	NA	NA	NA
Number of observations	48	48	48	48	48
Number of stochastic trends**	5	5	5	5	5

This result shows that natural resources, human development index, energy depletion, CO₂ emissions, and economic growth have integration. This data testing method determines whether there is a relationship between two or more time-related series. As a result, each measured variable, such as natural resources, human development index, energy depletion, CO₂ emissions, and economic growth, has several data points that can be measured, one of which is time. Moreover, this finding provides insight into the degree of responsiveness of two variables over a specific time to a given average price.

Table 5, Table 6 present the main long-run results for mixed effects GLME and robust GEE population average models. CO₂ emissions and economic growth are negatively related to natural resources in China, while the human development index is positively associated with energy depletion. Energy depletion is significant at 1% significance, while CO₂ emissions are significant at 5%. The human development index and economic growth are significant at 10% significance. In addition, CO₂ emissions and economic growth devalue natural resources, while the human development index and energy depletion increase them.

Table 5.

Gaussian identity mixed-effects GLME.

	Coef.	Std. Err	z	P>|z|	[95% Confidence Interval]
HDI	.4,083,479*	.8316904	0.49	0.023	−1.221735	2.038431
EGD	.7390417***	.0259252	28.51	0.000	.6882291	.7898542
CO2	−.6386266**	.2085342	−3.06	0.002	−1.047346	−.2299072
GDP	−.0084064*	.1002767	−0.08	0.033	−.2049451	.1881322
_cons	1.163163***	.1219864	9.54	0.000	.9240737	1.402252
Iteration 0: log likelihood	56.286413	Wald chi2 (4)	1019.35
Iteration 1: log likelihood	56.286413	Prob > chi2	0.0000
var (e.NRP)	.0058854**		.001189		.003961	.0087447

***,**and*show significance at 1%,5%, and10%.

Table 6.

Robust GEE population-averaged model.

	Coef.	Std. Err	z	P>|z|	[95% Confidence Interval]
HDI	.3949139*	.8383846	0.47	0.038	−1.24829	2.038117
EGD	.7400744***	.0261411	28.31	0.000	.6888388	.79131
CO2	−.6449249**	.2101699	−3.07	0.002	−1.05685	−.2329996
GDP	−.0013798*	.1000046	−0.01	0.089	−.1973851	.1946256
_cons	1.157346***	.1228245	9.42	0.000	.916614	1.398077
Scale parameter	.0059033
Correlation: exchangeable avg	3.5	Prob > chi2	0.0000		Wald chi2 (4)	1019.00

***,**and*show significance at 1%,5%, and10%.

The COVID-19 pandemic is threatening human development. Human development today is at a level that is comparable to deprivation in several dimensions. In addition to new resources directed at boosting health system responses, the crisis is hitting all of the human development's constituent elements hard: income, health care, education, and social services. The human development index is 10% significant. The positive coefficient value explains that a 1% increase in the human development index increases natural resources by 0.4038479% in the long term. The findings suggest that a country with abundant natural resources can develop much more quickly than one with limited natural resources. We rely on natural resources for food, energy, health, and enjoyment, including air, land, water, wildlife, plants, and soil. Taking care of them can improve our air quality, reduce flooding, and provide construction materials. Natural resources are used to create a variety of other resources, such as marble for flooring. In the case of natural resources that man uses to make other resources, such as dams, roads, sports complexes, etc., these are considered human-made resources. It is, therefore, important to develop human resources as a part of the natural resource development process (Dogan et al., 2020). This finding indicates that resources are not only derived from nature but also from human beings themselves. When natural resources are used for irrigation or energy production, they become resources, just as rivers are natural resources.

Climate change caused by the rise of greenhouse gases leads to soil erosion, global warming, species extinction, and biodiversity loss. As resources are extracted, and industrialization occurs, energy, food, water, and medical care become more readily available and reliable, allowing the global population to grow and significantly affecting global climate and ecosystems. Energy depletion is 10% significant. In the long run, a 1% increase in energy depletion will result in a 0.7390417% improvement in natural resources. Fossil fuel extraction is responsible for climate change that alters the Earth's ecosystems and affects people's and the environment's health. Soils can become destabilized, erosion will increase, and nutrient levels will decrease due to mining and deforestation. As erosion increases, rivers and streams can also become contaminated by sediment and pollutants. Human use and ecosystems both suffer from reduced freshwater availability.

During the COVID-19 pandemic, there is a misconception that nature is getting a break from humans. Some factors increase pressure on rural areas in the tropics, including land grabbing, deforestation, illegal mining, and wildlife poaching. Aside from affecting species populations, ranges, biodiversity, and interactions between organisms, habitat destruction also impacts wildlife. Extracting a resource can disrupt a habitat differently depending on the method used. When ecosystems are fragmented, species can become extinct. Contrary to conventional logging techniques, sustainable logging methods may minimally impact species populations and biodiversity. Similarly, bottom trawls and long-lines kill seabirds, turtles, and marine mammals (referred to as bycatch) unnecessarily when they fall prey to these fishing methods. Bycatch can be significantly reduced when different types of traps are used. CO₂ emissions are 5% significant in the long run. A 1% increase in CO₂ emissions will result in a 0.6386266% degradation of natural resources. This finding indicates that due to CO₂ emissions from natural resources, rapid economic growth could increase energy consumption due to swift economic growth. Ocean outgassing, decomposing biomass, volcanoes venting, and even ruminant animals emitting carbon dioxide into the atmosphere are natural sources of atmospheric CO₂ emissions. CO₂ is primarily produced by burning fossil fuels. Deforestation, land clearing for agriculture, soil degradation, and other human-induced impacts on land can also cause CO₂ emissions. Humans are releasing carbon dioxide into the atmosphere at an extremely rapid rate, causing it to accumulate at an extremely rapid rate. Burning fossil fuels means releasing millions of years of carbon absorbed by plants into the atmosphere.

While COVID-19 has several negative impacts on natural resources, tropopause also appears to have some positive effects, including short-term reductions in indoor and outdoor air pollutants. Resources such as soil and land area, forest wealth, rivers and minerals, a favorable climate, and others are considered natural resources. It is vital for economic growth that natural resources are abundant. Global warming, non-renewable resource consumption, pollution and habitat destruction are all effects of economic growth on the environment. The environment is not always damaged by economic growth. Natural resources skew economic growth since intensive use increases output while depleting them more quickly. Natural resources play a crucial role in economic growth because they are inputs in production. A negative coefficient of economic growth is a sign of 10%. Natural resources decrease by 0.0084064% for every 1% increase in economic growth. This finding indicates that in addition to affecting natural and environmental resources directly or indirectly, economic activities are also affected by them. Natural resources are continually extracted, processed, manufactured, transported, and consumed. These activities add stress to environmental systems and introduce waste into the environment. Sustainable development entails a high level of the social and economic well-being of the people that is inter-generationally balanced, which has developed into a set of principles that define the rational behavior of various stakeholders. Sustainable development processes are underpinned by effective governance, adequate resource endowments, and demographics that must be coordinated according to sound economic principles.

5. Conclusion and policy implications

In an effort to contain the COVID-19 pandemic, governments around the globe closed cities, relocated work and study, and suspended activities. Epidemics and government lockdowns in various countries caused changes in production, energy consumption habits, and other energy-related changes. As a result of COVID-19, the natural resource sector has experienced unprecedented andropause. Scientists have paid much attention to how the pandemic affects the energy sector. As a result of COVID-19, energy demand is changing in conjunction with implementing a low-carbon economy, daily community life and utilities’ profitability, national and global climate targets, and environmental conditions. Different aspects of the energy sector were examined in many studies to determine the effects of COVID-19. Governments and scientific communities have urged a green recovery from COVID-19 worldwide, which includes implementing multi-actor interventions and environmentally friendly technologies to prevent future pandemics by increasing and safeguarding the sustainability of environmental and biodiversity management.

Food production, biodiversity preservation, and human health and well-being depend on soil health today and in the future. Despite helping prevent COVID-19 spread, the ongoing COVID-19 lockdown measures have seriously adversely affected the global environment due to socio-economic disruptions and the migration of laborers from the urban areas, which has shifted their activities and changed the pressure on natural resources. Biodiversity and agricultural sectors have been particularly affected, including soil, forest resources, livestock, water, fisheries, and wildlife management. As a result of the COVID-19 pandemic, human activities are directly influencing soil and associated components, such as an increased surplus. A potato glut in French fries leads to millions of gallons of milk being thrown away daily and mass burials of poultry and swine in the US. As a result of border closures, lockdowns, and curfews resulting from the COVID-19 pandemic, impacts were also observed on beef producers. Biodiversity, soil quality, and groundwater quality are all affected in the long run.

The depletion of natural resources is expected to decrease in the long run due to lower energy consumption. These findings suggest that the policies discussed here will address the needs of people without access to modern energy carriers, improve energy supply reliability, encourage energy efficiency, and accelerate the development and implementation of clean and safe advanced fossil fuel technologies and new renewable technologies. It is either under-exploited or not yet developed that clean, efficient, and secure technologies exist. These technologies, however, may provide solutions to environmental and health concerns associated with fossil fuel technologies. Sustainable energy systems can be encouraged through a number of broad policies. The changes would be significant if they were combined and appropriately implemented. To achieve sustainable development, they essentially aim to harness market efficiencies. As part of the effort to make markets more efficient, policymakers are suggested to include: recruiting private capital, eliminating subsidies for conventional energy production and consumption, and restructuring the energy sector, where such is not already happening—internalizing externalities, such as health and environmental impacts, and promoting energy efficiency—building institutional and human capacity and encouraging innovation in the energy sector. Improve market operations and public benefits by introducing broader and more effective regulatory measures, establishing closer ties between multilateral trade and environmental protection, and more effective international cooperation.

Sustainable development encourages policymakers to implement strategies, policies, and instruments that improve the functioning of markets. Sustainability challenges are large and diverse, yet we do not see widespread or rapid changes in any of these directions, despite their scale and scope. Political will and public support are difficult to muster without an appropriate sense of urgency. Many sustainable energy policy instruments enjoy widespread support, despite lacking general commitment to a sustainable energy path. Energy efficiency and quality improvements include improving energy services such as heating, cooling, lighting, mobility, and motive power, as well as putting in place social policies for people without access to energy.

When environmental conditions are unacceptable, local communities often find alternatives. The greatest challenge society faces is planning for the future and managing natural resources as it transitions from meeting present needs to planning for the future. Energy and energy services will require a significant reorientation if such actions are taken against competing for short-term interests. It is suggested that policymakers implement a new global consensus on sustainable development aligned with a new energy paradigm and redirect individual, local, and national priorities. It will take greater public awareness, information, and commitment to shift the sustainability debate to center stage (Dogan et al., 2022). Implementing many of the policies discussed here will be highly challenging if public support for sustainable energy development is not forthcoming.

The limitation of this study is that although it considers COVID-19's effects on natural resources, it is not included in the analysis due to data limitations. Depending on the data availability, future research may also incorporate this aspect. COVID-19 and the natural resource nexus have become a global issue, but the scope of this study is limited to the Chinese economy. For a more comprehensive evaluation and quality enhancement, future research may include a group of countries for the panel study. Data for variables, such as energy depletion and CO₂ emissions, are available until 2019. The updated data may be used in future research. In addition, this is a linear study that examines the effects of the human development index. Research on the impact of the EKC and LCC hypotheses may be conducted to assess their impact on natural resources.

Author statement

Yi Xu: Writing- Original draft preparation, Methodology, Modeling, and Software. Fang Zhao: Supervision and reviewing.

Declaration of interest statement

I declare that all authors approve that no known competing conflict of interest exists in submitting this manuscript for publication in the Resources Policy.