The trade-off between energy consumption, economic growth, militarization, and CO2 emissions: does the treadmill of destruction exist in the modern world?

Abstract

Militarization is crucial for the sovereignty of a nation; however, there are many environmental hazards associated with increased military spending. Previous panel studies mainly captured the short-run effects of militarization on the environment. Limited scholars determined the long-run environmental impacts of militarization but they mostly ignored possible cross-sectional dependence and heterogeneity problems in panel data. Our research highlights this deeply neglected area and examines the impact of militarization on the environment in 22 OECD countries by controlling economic growth, renewable energy, and fossil fuel consumption. Drawing on an extensive dataset from 1971 to 2020, we employed advanced econometric approaches robust against endogeneity, heterogeneity, and cross-sectional dependence. The results of the cross-sectional augmented autoregressive distribute lag (CS-ARDL) analysis indicate a positive contribution of militarization to CO2 emissions implying that militarization is adding to the environmental degradation in OECD nations. This evidence proves the treadmill of destruction theory for OECD nations in the modern world. Economic growth and fossil fuels consumption increase CO2 emissions, while renewable energy mitigates emissions. Moreover, economic growth Granger causes militarization. Our results suggest that reduction in militarization level and energy conservation strategies will not hamper the economic progress of selected OECD countries.