Reversing environmental deterioration: the role of human capital in developing countries

Mitigating environmental deterioration and curbing CO₂ emissions has moved center stage in policy debate and academic research. Employing data from 14 developing countries with a large share of carbon emissions at a global scale, we examine the effect of human capital on environmental deterioration over the period 1980 to 2019. We account for human capital by focusing on current education expenditure to offer a better insight into the role of policy making in averting environmental deterioration in developing countries. Results show that human capital advancement is robustly associated with reductions in CO₂ emissions. We additionally provide a comprehensive analysis of the human capital-environmental deterioration nexus along the conditional distribution by employing the Machado and Silva (J Econom 213(1):145–173, 2019) estimation method of quantile regressions with fixed effects. Human capital is affecting CO₂ emissions negatively and statistically significantly across the distribution, except for the upper tail.