Decoupling Growth From Emissions: The Roles of Resources, Patents, and Governance in CAREC Economies

Amid increasing pressure to decouple economic growth from environmental degradation, this study investigates how technological, institutional, and resource‐based factors influence carbon emissions in the Central Asia Regional Economic Cooperation (CAREC) economies. The core aim is to determine whether economic expansion and globalization necessarily raise CO 2 emissions or if these effects can be mitigated through governance, innovation, and strategic investment. This study analyzes the drivers of CO 2 emissions in CAREC economies from 1995 to 2022 using an unbalanced panel. CO 2 emissions are modeled against gross domestic product (EG), patents (PAT), globalization (KOFGI), oil revenue (LOR), natural resource rents (NNR), investment (INV), technological innovation (INT), and government effectiveness (GE). After addressing cross‐sectional dependence, slope heterogeneity, and cointegration through CIPS, Pesaran–Yamagata, and Westerlund tests, we estimate within‐country fixed effects and cointegration‐robust FMOLS models with interaction terms linking resources to technology and investment. Results are consistent across estimators. EG is the main positive driver of CO 2 , and KOFGI also increases emissions. PAT is weakly significant. INT shows a small direct positive link but mitigates resource‐based emissions through negative LOR × INT and NNR × INT effects. GE lowers emissions, while LOR's direct effect is negligible, and NNR is mildly positive. INV has mixed effects but gains importance through interactions. Overall, growth and openness raise emissions unless supported by effective institutions and technology‐driven investment. The study jointly models growth, innovation, openness, resources, investment, and governance within a cointegration‐based framework that connects short‐run and long‐run dynamics. Policy implications align with SDGs 7, 8, 9, 12, 13, 16, and 17: channel resource revenues into clean energy and efficient infrastructure, promote digital and managerial technologies, and strengthen governance to ensure integration and capital deepening contribute to sustained decoupling of emissions from growth in the CAREC region.