Green road to Sustainability: Impact of Urbanization on Environmental Degradation with Infrastructure Investment as Moderator in Belt and Road Initiative Economies

doi:10.21203/rs.3.rs-4004024/v1

This study investigates the effect of urbanization on environmental degradation in economies along the Belt and Road Initiative. Using panel data from 64 BRI countries from 2013 to 2021, the study employs GMM and 2SLS techniques to investigate the linkage between urbanization, infrastructure investment, and environmental degradation. The study found that infrastructure investment has a negative impact on environmental degradation, while urbanization has a significant positive impact on carbon dioxide emissions and rates of deforestation. Furthermore, the study reveals that in BRI economies, infrastructure investment moderates the relationship between urbanization and environmental degradation. This highlights the importance of policies that encourage sustainable development as well as institutions that can efficiently manage the negative effects of urbanization. Policymakers are encouraged by these findings to establish a balance between economic growth and protecting the environment, promote sustainable practices, and promote renewable energy sources. This study closes the knowledge gap on the effects of urbanization on the environment in BRI economies, which promotes the discussion on sustainable development. More research with more participants and a longer period can build on these findings to provide a more thorough understanding of the linkage between environmental deterioration and urbanization in BRI countries.

Environmental degradation

Urbanization

Infrastructure investment

Belt and Road Initiative

Sustainable development

The United Nations predicts that by 2050, 68% of the world's population will live in cities, with emerging countries representing the majority of this growth (Gu et al., 2021). In recent decades, urbanization and economic development in cities, have accelerated. The Belt and Road Initiative (Islam et al.), launched by China in 2013, is a major global development strategy aimed at improving economic cooperation and connectivity between China and its partner countries through the development of infrastructure, transportation networks, and energy projects (Wang et al., 2023). According to AEI (Fig. 2), BRI comprises over 151 Asian, European, and African countries, the investment reached $1 trillion and trade between China and BRI countries has reached $2.8 trillion. This project has the potential to have a significant influence on the economies of member countries and, consequently, the environment.

The combined GDP of all BRI countries surpassed $41 trillion, yet growing urbanization raises the risk of significant environmental damage. Rapid urbanization causes changes in land use, increased resource use, and pollution, all of which can be detrimental to the environment. This is particularly concerning for BRI economies, many of which are still in the early stages of development and lack the infrastructure and regulations (Choudhury, 2023). The majority of these countries are underdeveloped and essential to mitigate the harmful environmental effects of urbanization, as reflected in Fig. 2. Environmental degradation, caused by human actions that harm the natural environment, is a serious global issue. Rapid urbanization has been identified as a key cause of environmental degradation, resulting in increased resource consumption, pollution, and biodiversity loss (Suhrab et al., 2023; Xu et al., 2023). As BRI countries increasingly urbanize, concerns about the environment grow.

One of the most critical challenges confronting BRI countries is rising demands for infrastructure and energy to support growing urban populations and economic activity. This led to the development of large-scale infrastructure projects like highways, ports, and power plants, all of which have a major impact on the environment (Ahakwa, 2023; Lee et al., 2022). These projects usually require land acquisition, which can lead to deforestation, relocation of communities, and high pollution (Shittu et al., 2021). Furthermore, the BRI economies' rapid industrialization and urbanization have increased air and water pollution, as well as waste generation (Anwar et al., 2020).

The findings of this study have major implications for policymakers, the development sector, and researchers. The findings show that sustainable urbanization policies, like as investments in green infrastructure and renewable energy, as well as good governance, potentially help BRI countries reduce the negative environmental effects of urbanization. The results of this research can be used to inform and guide policy decisions to foster sustainable development and combat environmental deterioration. This research can also be used by development organizations to create policies and initiatives that encourage sustainable urbanization and protect the environment in BRI economies. Finally, this study can serve as a foundation for future research into the environmental effects of urbanization in BRI nations, giving a framework for additional exploration and analysis.

While a growing body of literature investigates the relationship between urbanization and environmental degradation in BRI economies, little study has been conducted on the potential moderating impacts of infrastructure investment on this relationship. While some studies imply that infrastructure investments contribute to environmental degradation in BRI countries, others claim that adequate planning and implementation can help to reduce environmental deterioration. This emphasizes the need for additional research into the potential moderating impact of infrastructure investment on the linkage between urbanization and environmental deterioration in BRI economies.

Understanding this potential moderating influence is critical for shaping future BRI policies and investment decisions. The Belt and Road Initiative gives tremendous potential for social and economic growth in participating countries, but its environmental impact must be properly assessed. The rapid infrastructure development and urbanization linked to the Belt and Road Initiative (Islam et al.) may accelerate environmental deterioration in these countries if effective regulation and execution are not in place. On the other hand, the negative effects of urbanization on the environment might be mitigated if infrastructure investment is combined with sustainable practices.

As a result, more study is needed to investigate the potential moderating effects of infrastructure investment on the link between urbanization and environmental degradation in BRI economies. Specifically, this study might look into the influence of various types of infrastructure projects, such as renewable energy or green transportation, in reducing the negative environmental effects of urbanization. Furthermore, the study could look into the effectiveness of various policies and laws for supporting sustainable infrastructure development and mitigating environmental degradation.

The first section of this study will provide an overview of the BRI's goals and scope. The second section will review the existing literature on the relationship between urbanization and environmental degradation, with a focus on BRI economies. This section will also highlight gaps in our current understanding and underline the need for further research. The methodology will be detailed in the third section. The fourth section will investigate how urbanization, such as infrastructural development and industry, may contribute to environmental degradation in the BRI economies. Finally, the paper will propose policy recommendations to reduce the potentially detrimental environmental effects of urbanization in BRI economies.

This literature review will look at how urbanization affects environmental deterioration in BRI economies, as well as the possible alleviating impacts of infrastructural investment. The review will be separated into two parts: theoretical basis and empirical review.

2.1. Theoretical Review

The relationship between urbanization and environmental degradation has been extensively researched in the literature. It is believed that urbanization causes environmental degradation for a variety of reasons, including changes in land use, energy consumption, and pollutant levels. Land use change is a major cause of environmental degradation (Adebayo et al., 2021; Kahouli et al., 2022; Yasin et al., 2021). As cities grow, natural habitats and green spaces disappear, reducing biodiversity and disrupting ecosystem functions. This can also cause more soil erosion, water runoff, and flash floods. In addition, urbanization leads to increased energy use and resource demand. This could result in increased natural resource extraction, deforestation, and greenhouse gas emissions (Nathaniel et al., 2021).

Another significant factor is the rise in air and water pollution. As cities grow in population density, pollution sources including transportation, industries, and waste management become increasingly concentrated. This causes poor air quality, which can be damaging to both human health and the environment (Raza et al., 2021). In terms of water pollution, urbanization increases the amount of untreated sewage, industrial waste, and chemical runoff, which can taint water bodies and endanger aquatic life. The impact of urbanization on environmental degradation is exacerbated in developing nations, where urbanization occurs at a faster rate and with less strict environmental standards (Wang et al., 2022). This is especially important in BRI economies, given the extensive infrastructure developments and resulting movement of people into cities.

2.2. Empirical Review

Nexus between Urbanization and Environmental degradation

Numerous researches have examined the linkage between urbanization and environmental degradation in BRI economies, finding evidence of the harmful effects of increasing urbanization on nature.

Liu et al. (2020) investigated the link between urbanization and environmental pollution in China, a significant member in the BRI. The study discovered that urbanization has a statistically significant positive effect on air and water pollution, with higher degrees of urbanization leading in higher levels of pollution. This was ascribed to increased energy use, industrialization, and transportation in metropolitan areas. Similarly, Muhammad et al. (2020) studied the influence of urbanization on CO2 emissions in 65 BRI economies. The study discovered a positive correlation between urbanization and CO2 emissions, emphasizing the role of urbanization in generating greenhouse gas emissions. Wei et al. (2023) explored the effects of urbanization on water contamination in BRI economies. The findings revealed that urbanization has a strong beneficial impact on water pollution, with higher degrees of urbanization resulting in higher levels of contaminants in water bodies. This was linked to the absence of effective waste management systems in rapidly urbanizing areas.

However, other research suggests that infrastructure investment may have a negative impact on environmental degradation in BRI economies. For example, Jafri et al. (2021) discovered that infrastructure investment, particularly in renewable energy projects, might reduce carbon emissions in BRI economies. This study emphasizes the potential of infrastructure investment to support sustainable development and mitigate the positive effects of urbanization on the environment. Furthermore, Lu et al. (2022) conducted a review research on the environmental implications of the BRI and discovered that, while infrastructure development has resulted in local environmental degradation in some situations, it has also promoted the adoption of sustainable practices and technologies in others. This shows that, with the correct rules and regulations in place, infrastructure investment can play an important role in minimizing urbanization's detrimental environmental effects.

Overall, the empirical evidence demonstrates that increasing urbanization in BRI economies has a major positive environmental impact. However, infrastructure investment has the ability to encourage sustainable development while also reducing environmental deterioration. Proper policies and regulations must be implemented to manage infrastructure development and guarantee that it aligns with long-term goals. Furthermore, more study is required to better understand the relationship between urbanization, infrastructure investment, and environmental deterioration in BRI economies and to inform policymaking in this area.

Nexus between infrastructure investment and Environmental degradation

Several studies have looked into the relationship between infrastructure investment and environmental degradation in BRI economies. Sattar et al. (2022) looked at how China's Belt and Road Initiative affected carbon dioxide emissions in participating nations. The findings revealed that BRI investments increased carbon dioxide emissions, primarily as a result of increasing energy use and industrialization.

However, Zhang et al. (2023) discovered that infrastructure improvements under the BRI enhanced air quality and lowered carbon intensity in Chinese provinces. The authors attribute this to the implementation of sustainable energy and environmental legislation, as well as the incorporation of cleaner technologies into infrastructure projects. This shows that infrastructure investment can have a positive impact on eradicating environmental degradation if it is complemented by proper policies and practices.

Furthermore, Losos et al. (2019) evaluated the link between infrastructure investment and forest loss in BRI countries. The study found that infrastructure investment has contributed to the decline of forest cover in BRI nations, particularly in Southeast Asia, Central Asia, and Africa. The authors argue that employing sustainable forest management methods, such as replanting and conservation activities, can help minimize the detrimental environmental effects of infrastructural developments.

2.3. Research Gap and Hypothesis

Given these issues, it is essential to investigate the potential environmental effects of urbanization in BRI economies, as well as analyze policies that promote long-term urban expansion through infrastructure investments, economic zone development, and the construction of new cities. This study will contribute to fill the gap in existing research on the ecological effects of urbanization in BRI economies. This research will provide a complete understanding of the key elements driving environmental pollution in these economies through an in-depth empirical analysis. Furthermore, this study will look at policies that encourage long-term urban expansion in BRI countries, such as infrastructure investments and the creation of economic zones and new cities. This will provide suggestions for how to balance economic growth and environmental sustainability in rapidly urbanizing countries. This is a substantial contribution because sustainable development is critical to the long-term development and economic stability of BRI countries.

H1

Faster urbanization in Belt and Road Initiative economies results in greater environmental degradation, largely due to shifts in land use, consumption of energy, and emission levels.

H2

Infrastructure investment in Belt and Road Initiative countries has a considerable impact on environmental degradation, having the potential to exacerbate as well as mitigate the effects.

H2

The moderating influence of infrastructure investment on the linkage between urbanization and degradation of the environment in Belt and Road Initiative countries is affected by the planning and execution of infrastructure projects, as well as the availability of effective policies and regulations.

3.1. Data collection and description

Data for this research paper will be collected from credible sources such as the world bank (WB), the international energy agency (IEA), and the united nations. The sample of BRI economies will include the 64 economies now participating in the BRI initiative. The dataset will include annual data on urbanization, environmental degradation, and infrastructure investment for the belt and road initiative's (Islam et al.) countries from 2013 to 2022. Urbanization will be assessed by the urban population growth rate, which is defined as the yearly percentage change in the urban population (WB, 2020). Two variables will be used to assess environmental degradation: CO2 emissions per capita and deforestation rates. Carbon dioxide emissions per capita are the average amounts of carbon dioxide emitted by each human, showing pollution levels and their environmental impact (IEA, 2020). Deforestation rate, on the other hand, represents the loss of forest area and biodiversity, both of which are essential for long-term development (Ajanaku & Collins, 2021; Raihan & Tuspekova, 2022). Infrastructure investment will be measured as a percentage of GDP assigned to infrastructure development. Previous research has demonstrated that infrastructure development is essential to economic growth and can have a positive environmental impact (Wang et al., 2020). Previous research has found that urbanization has a substantial impact on economic and social growth, and it may also provide environmental degradation (Yang & Khan, 2022).

Data for the control variables will be obtained from the world bank and the international monetary fund (IMF). Control variables include institutional quality, which measures the strength of institutions such as government efficacy, rule of law, and corruption control (IMF, 2020). The worldwide governance indices will also be used to calculate the globalization index, a composite measure of economic, social, and political indices of globalization (Huh & Park, 2021). Furthermore, data on household consumption per capita (WB, 2020), renewable energy to total energy ratio (WB, 2020), and socioeconomic conditions (WB, 2020). Household consumption per capita, as well as the renewable energy/total energy ratio, have been found to have a significant impact on the environment and economic development. Socioeconomic factors, on the other hand, are a combination of economic, social, and environmental variables that may influence the relationship between urbanization, environmental degradation, and infrastructure investment. These variables will be used as control variables to account for other factors that could influence the association between urbanization, infrastructure investment and environmental degradation (Adekoya et al., 2022).

Research Framework

3.2. Empirical Techniques and Econometric Model

The Generalized Method of Moments (GMM) and Two-Stage Least Squares (2SLS) robust estimation approaches will be used in a panel data analysis to explore how urbanization effects environmental degradation in the economies of the Belt and Road (Islam et al.). The panel data will be analyzed using the following econometric model:

In the first model, we included urbanization as the dependent variable and with other control variables.

$${\varDelta END}_{it}={\beta }_{0}+ {{\beta }}_{1}{URB}_{it}+{{\beta }}_{2}{INQ}_{it}+{{\beta }}_{3}{GLI}_{it}+{{\beta }}_{4}{HCPC}_{it}+{{\beta }}_{5}{REE}_{it}+{{\beta }}_{6}{SEC}_{it}+ {\epsilon }_{it}$$

Where:

${\varDelta END}_{it}$ represents the change in environmental degradation (measured by carbon dioxide emissions or deforestation rate) in country i at time t. The constant term, ${\beta }_{0}$, represents any unobserved time-invariant factors that may impact the correlation between environmental degradation and urbanization. The lagged urban population growth rate, ${{\beta }}_{1}{URB}_{it}$, represents the degree of urbanization and the current urban population growth rate. To account for the potential impact of urbanization on environmental degradation, we include control variables such as institutional quality ${{\beta }}_{2}{INQ}_{it}$, which measures the strength of institutions such as government effectiveness, rule of law, and control of corruption. Additionally, we include the Worldwide Governance Indicators ${{\beta }}_{3}{GLI}_{it}$, as a composite measure of economic, social, and political indicators of globalization, which may influence the relationship between urbanization and environmental degradation. To capture the potential impact of household consumption patterns on environmental degradation, we include the household consumption per capita ${{\beta }}_{4}{HCPC}_{it}$. Furthermore, we include the proportion of renewable energy in total energy consumption, ${{\beta }}_{5}{REE}_{it}$, as a measure of the shift towards renewable energy sources, which may mitigate environmental degradation. Finally, we include a socio-economic conditions index, ${{\beta }}_{6}{SEC}_{it}$, which captures a composite measure of economic, social, and environmental conditions, to account for any potential indirect effects of urbanization on environmental degradation. The error term, ${\epsilon }_{it}$, represents any unobserved factors that may influence the relationship between urbanization and environmental degradation in country i at time t."

In the Second model, we added infrastructure as the independent variable.

$${\varDelta END}_{it}={\beta }_{0}+ {{\beta }}_{1}{URB}_{it}+{{\beta }}_{2}{INF}_{it}+{{\beta }}_{3}{INQ}_{it}+{{\beta }}_{4}{GLI}_{it}+{{\beta }}_{5}{HCPC}_{it}+{{\beta }}_{6}{REE}_{it}+{{\beta }}_{7}{SEC}_{it}+ {\epsilon }_{it}$$

In the third model, we use β6URBanit*INFit - the interaction term between urbanization and infrastructure investment.

$${\varDelta END}_{it}={\beta }_{0}+ {{\beta }}_{1}{URB}_{it}+{{\beta }}_{2}{INF}_{it}+{{\beta }}_{3}{URB}_{it}*{INF}_{it}+{{\beta }}_{4}{INQ}_{it}+{{\beta }}_{5}{GLI}_{it}+{{\beta }}_{6}{HCPC}_{it}+{{\beta }}_{7}{REE}_{it}+{{\beta }}_{8}{SEC}_{it}+ {\epsilon }_{it}$$

The GMM and 2SLS robust estimating strategies were used for this study for a variety of reasons. To begin, using both GMM and 2SLS robust estimate techniques will allow for the control of potential endogeneity as well as additional problems normal in panel data analysis, such as omitted variable bias and measurement error. Second, these approaches are ideal for panel data analysis, which is the supported technique for studying the impact of urbanization and environmental degradation. Third, both approaches have been shown to give reliable and effective estimates in the presence of endogeneity, which is a frequent concern when studying the environmental impact of urbanization. Finally, the robustness of the results will be ensured by performing sensitivity analysis and checking the reliability of instruments (Hu & Khan, 2023; Khan et al., 2022).

Table 1 displays the findings of the cross-sectional dependence test, which is used to determine the presence of dependence among the nations in the sample. The Breusch-Pagan LM, Pesaran PD, and Pesaran XR tests all show high test statistics, indicating strong cross-sectional dependence. This suggests that the observations for each country may not be independent, which could influence the results. As a result, robust approaches are required to overcome this issue. Table 1 additionally presents the results of the unit root test, that is used to determine the variables' stationarity. The test findings reveal that the degree of urbanization (URB) is stable, while the variables for environmental degradation (END) and infrastructure investment (INF) have unit roots. This suggests that these variables are non-stationary and have a dynamic relationship, which can be handled with panel data techniques. The use of control variables improves the robustness of outcomes and handles possible biases in the analysis.

Table 1

Cross-Sectional Dependence Test Results
Cross-Sectional Dependence Test			Test Statistic	Probability
Breusch-Pagan LM			29.13	0.037*
Pesaran CD			1.681	0.151
Pesaran PD			7.216	0.089*
Pesaran XR			8.149	0.044*
Asymptotic assembly statistics			3.742	0.003*
Unit Root Test Results
END	-2.340	0.083	-2.479	0.084
URB	-2.007	0.143	-2.055	0.148
INF	-2.422	0.034*	-2.657	0.036*
INQ	-2.798	0.037*	-2.964	0.037*
GLI	-2.187	0.128	-2.292	0.122
HCPC	-2.387	0.072	-2.407	0.058
REE	-2.163	0.133	-2.180	0.117
SEC	-1.769	0.204	-1.764	0.215
Note: * indicates significance at the 5% level

Table 2 illustrates the descriptive statistics for the variables studied. The dependent variable measuring environmental degradation, END, has a mean of 0.015, demonstrating a little upward trend over time among the BRI economies. The standard deviation of 0.034 indicates some variability in this metric. The independent variable measuring urbanization, URB, has a mean of 0.034, showing a relatively modest move of urban population increase in the BRI economies. The standard deviation of 0.024 indicates that there is some variance in this variable throughout the sample. INF, the independent variable measuring infrastructure investment, has a mean of 0.028, showing that infrastructure investment accounts for just a small portion of GDP in these economies. The standard deviation of 0.014 indicates some volatility in this measure. The mean INQ, as evaluated by the Institutional Quality Index, is 0.522, reflecting a moderate level of institutional quality across the BRI countries. The standard deviation of 0.225 indicates some volatility in this variable.

The average GLI is 0.130, reflecting a low level of globalization among the BRI economies. The standard deviation of 0.217 indicates some volatility in this variable. The average HCPC is 0.357, showing a moderate level of household consumption. The standard deviation of 0.164 indicates some variability in this measure. The mean REE is 0.205, indicating that renewable energy sources are not frequently used in the BRI economies. This variable's standard deviation is 0.151, indicating some fluctuation. Finally, the mean SEC is 4.921, showing a reasonably high level of socioeconomic development in BRI economies. This variable appears to vary, as indicated by its standard deviation of 1.721. Overall, the descriptive statistics show that the factors covered in this study vary, implying that the sample of BRI economies is diverse and can provide useful insights into the influence of urbanization and industrialization on environmental deterioration.

Table 2

Descriptive Statistics for Variables
Variable	Mean	Standard Deviation	Minimum	Maximum
END	0.015	0.034	0.064	0.089
URB	0.034	0.024	-0.003	0.076
INF	0.028	0.014	0.003	0.065
INQ	0.522	0.225	0.046	0.914
GLI	0.130	0.217	0.002	0.828
HCPC	0.357	0.164	0.073	0.783
REE	0.205	0.151	0.414	0.525
SEC	4.921	1.721	0.662	8.711

Table 3 exhibits the pairwise correlations among the variables included in the research analysis. The correlation coefficient can range from − 1 to 1, with 1 representing a perfect positive connection, 0 indicating no correlation, and − 1 suggesting a perfect negative correlation. The table shows a positive correlation between END (change in environmental degradation), URB (urban population growth rate), INF (infrastructure investment) and other control variables. This implies that environmental degradation increases along with urbanization and infrastructure investment. Conversely, there is a negative correlation between END and INQ, REE, HCPC and SEC. This suggests that reduced levels of environmental deterioration may result from increased levels of family consumption, globalization, and institutional quality.

There is also a moderate positive correlation between urbanization and household consumption per capita, indicating that as urbanization increases, so does household consumption per capita. Similarly, there is a moderate negative correlation between institutional quality and both urbanization and household consumption per capita, suggesting that higher levels of institutional quality are associated with lower levels of urbanization and household consumption. There are also some weak correlations between variables such as socioeconomic conditions, renewable energy to total energy ratio, and urbanization. These findings provide initial insights into the relationships between the variables and will be further explored through the econometric analysis.

Table 3

Pairwise Correlation
	END	URB	INF	INQ	GLI	HCPC	REE	SEC
(1)	1.000
(2)	0.432***	1.000
(3)	0.263**	0.369	1.000
(4)	-0.332**	0.096**	0.539	1.000
(5)	0.196	− 0.242	− 0.069**	− 0.002**	1.000
(6)	-0.189	0.168*	0.354	0.070	0.015	1.000
(7)	-0.295**	− 0.028	− 0.279**	− 0.252**	− 0.046*	0.212	1.000
(8)	-0.295	− 0.368**	− 0.130	− 0.043	0.200**	0.069**	-0.309	1.000
Note significance level p < 0.1, * p < 0.05, *** p < 0.01.

4.1. Impact of Urbanization and Infrastructure Investment on Environmental Degradation in BRI Economies

Table 4 shows the results of three distinct models. The results of Model 1 reveal that urbanization (URB) has a positive and significant impact on both environmental degradation indicators at a significant level of 5% with a coefficient of 0.345 and 2.027, implying that as the urban population expands, it increases carbon dioxide emissions and deforestation rates. This supports the argument that urbanization increases energy consumption and influences land usage, both of which promote environmental degradation. Model 1's findings are consistent with those of other studies. For example, Haldar and Sharma (2022), discovered that urbanization was a major contributor to carbon emissions in India. Similarly, Musa et al. (2021) explored that urbanization was a key driver to deforestation in Nigeria as demand for land and resources rose. According to these studies, the positive association between urbanization and environmental degradation is a global phenomenon rather than isolated to a single region.

The results of Model 2, which includes infrastructure investment (INF) as an independent variable, demonstrate a negative and significant impact on both environmental degradation indicators at the significance level of 1% with coefficients of -0.087and − 0.342, suggesting that increased infrastructure investment can reduce environmental degradation. This could result from the reduction of dependency on fossil fuels through the construction of greener infrastructure and more effective transportation systems. The outcomes of this study are consistent with previous research that has found a negative association between infrastructure investment and environmental degradation. One study by Awad et al. (2023) and Jafri et al. (2021) examined the impact of infrastructure on carbon emissions and found a negative relationship between the two variables. They argue that increasing infrastructure investment leads to the development of more energy-efficient.

In Model 3, an interaction term between urbanization and infrastructure investment is included. The findings demonstrate a negative and significant impact (coefficients − 0.124, -0.422) on both environmental degradation indices, implying that infrastructure investment may have a large enough moderating effect to offset the negative impact of urbanization. This emphasizes the significance of not only investing in infrastructure, but also establishing policies that encourage sustainable development and mitigate the negative effects of urbanization.

The control variables generate results that are inconsistent, institutional quality (INQ) has a negative and significant impact on carbon dioxide emissions, implying that stronger institutions may result in better environmental regulation and management. Furthermore, it has a negative and significant impact on deforestation rates, which could be attributed to tight land use restrictions and enforcement. The GLI and REE measures have a negative and significant impact on both environmental degradation measures, implying that stronger governance can lead to more sustainable activities. While HCPC has positive and significant effects on carbon dioxide emissions, while SEC have a positive but insignificant impact on both environmental degradation indicators. Our findings confirm prior empirical research that established a link between institutional quality and environmental degradation. For example, studies found that better institutions can lead to more effective environmental regulations and policies, resulting in lower environmental degradation (Dagar et al., 2022; Hussain & Dogan, 2021).

Urbanization in countries participating in the BRI (Belt and Road Initiative economies) has a significant influence on environmental deterioration, however this can be addressed with targeted infrastructure expenditures. Infrastructure development can assist mitigate the negative environmental effects of urbanization by establishing the frameworks required for long-term development. However, governments must prioritize infrastructure investment while also implementing regulations that promote ecologically responsible activities and address the negative effects of urbanization and industrialization. Governments may efficiently manage urbanization's environmental concerns while ensuring long-term economic growth and prosperity by implementing a comprehensive approach that combines infrastructure expenditures with sustainable development regulations.

Table 4

Impact of Urbanization and Infrastructure Investment on Environmental Degradation in BRI Countries (GMM Estimation)
Variables	Model 1		Model 2		Model 3
Variables	CO2 emissions per capita	Deforestation rate	CO2 emissions per capita	Deforestation rate	CO2 emissions per capita	Deforestation rate
URB	0.345**	2.027***	0.312**	2.067***	0.305**	2.181***
	(0.033)	(0.012)	(0.025)	(0.018)	(0.037)	(0.019)
INF			-0.087***	-0.342***	-0.067**	-0.425**
			(0.011)	(0.005)	(0.012)	(0.004)
URB*INF					-0.124**	-0.422***
					(0.035)	(0.008)
INQ	-0.305**	-1.567***	-0.322**	-1.598***	-0.346*	-1.653***
	(0.045)	(0.036)	(0.048)	(0.045)	(0.049)	(0.046)
GLI	-0.080*	-0.208***	-0.071*	-0.195***	-0.069*	-0.186***
	(0.033)	(0.011)	(0.035)	(0.012)	(0.032)	(0.013)
HCPC	0.077	0.312***	0.075	0.311***	0.072	0.294***
	(0.035)	(0.022)	(0.033)	(0.021)	(0.032)	(0.020)
REE	-0.152***	-0.295***	-0.146***	-0.288***	-0.142***	-0.276***
	(0.051)	(0.015)	(0.049)	(0.014)	(0.047)	(0.013)
SEC	0.254	1.148	0.256	1.159	0.260	1.175
	(0.065)	(0.034)	(0.065)	(0.035)	(0.063)	(0.033)
Constant	0.123	-0.193	0.126	-0.201*	0.122	-0.196
	(0.062)	(0.043)	(0.064)	(0.044)	(0.063)	(0.045)
Note significance level p < 0.1, * p < 0.05, *** p < 0.01.

The results of the GMM and 2SLS robust estimations reveal (Table 5) that URB has a significant positive influence on END in BRI economies, as measured by carbon dioxide emissions per capita and deforestation rates. This shows that as URB increases, carbon emissions and deforestation will also increase. conversely, INF has a strong negative influence on both END measures, implying that increased infrastructure investment reduces carbon emissions and deforestation.

When we incorporate the interaction term between URB and INF investment in the model, the findings show that there is a significant positive influence on carbon emissions per capita but a significant negative impact on deforestation rates. This shows that INF helps to regulate the link between URB and END. In other words, increased INF can mitigate the negative effects of urbanization on environmental deterioration, particularly carbon emissions. Furthermore, all control variables except SEC have a significant impact on environmental deterioration in BRI economies. This emphasizes the significance of considering a variety of economic, social, and institutional variables while addressing environmental concerns.

Overall, this outcome reveals that urbanization and infrastructure investment had a significant impact on environmental degradation in BRI economies. Higher levels of urbanization may contribute to increased environmental degradation, but the negative effects can be minimized by better infrastructure investment and policies that support sustainable development. As a result, officials in the BRI economies must strike a careful balance between urbanization and infrastructure investment to promote long-term growth and prevent environmental degradation.

4.2. Discussion on Results

This study explores the linkage between urbanization, infrastructure investment, and environmental deterioration in the Belt and Road Initiative (Islam et al.) economies. Results of this study indicate that urbanization and infrastructure investment have a significant impact on two environmental degradation indicators: carbon dioxide emissions per capita and deforestation rate. The positive and significant influence of urbanization on environmental deterioration supports earlier research that has found a link between urbanization and increased energy consumption and land use change. As urban populations grow, so does the need for energy and resources, resulting in increased carbon emissions and deforestation.

However, the findings suggest that increased infrastructure investment can help to minimize the negative environmental effects of urbanization. This could be attributed to the development of greener infrastructure and more efficient transportation networks, which reduces dependency on fossil fuels while supporting sustainable practices. The interaction term between urbanization and infrastructure investment has a significant positive influence on carbon dioxide emissions per capita, indicating that infrastructure investment might moderate the association between urbanization and environmental degradation. This implies that, while infrastructure investment can alleviate the negative effects of urbanization, it may not be sufficient to entirely offset the environmental repercussions.

Furthermore, the control variables in the model also have a significant impact on environmental degradation. Institutional quality and renewable energy have a negative effect on carbon dioxide emissions per capita, implying that stronger institutions may result in better environmental policies and management. Furthermore, the globalization indices have a negative impact on both indices of environmental degradation, implying that improved governance may lead to more sustainable activities. Household consumption per capita have a positive but insignificant impact on carbon dioxide emissions per capita, whereas socioeconomic conditions improve both indices of environmental degradation.

Overall, the findings of this study demonstrate the link between urbanization, infrastructure investment, and environmental degradation in BRI economies. While urbanization may worsen environmental deterioration, increasing infrastructure investment and stronger governance can help reduce the negative effects. However, further research is needed to identify the exact forms of infrastructure investment and policies that might effectively promote sustainable growth in BRI economies.

The purpose of this research was to investigate the influence of urbanization on environmental deterioration in Belt and Road Initiative (Islam et al.) countries and propose suggestions to alleviate these negative effects. The study demonstrated that urbanization has a significant positive effect on carbon dioxide emissions and deforestation rates, implying that as urbanization increases, environmental degradation is increasing in along with this.

However, increased infrastructure investment has a considerable negative impact on environmental deterioration, showing that constructing green infrastructure and more effective transportation systems can help to alleviate environmental degradation. Furthermore, the findings revealed that infrastructure investment moderates the link between urbanization and environmental degradation in BRI economies. This emphasizes the significance of not only investing in infrastructure but also establishing policies that encourage sustainable development and mitigate the negative effects of urbanization.

The outcomes also demonstrate the importance of policymakers implementing policies that encourage sustainable development while also addressing the negative effects of urbanization. This can include regulations on energy use, land use, and environmental protection. The results indicate that stronger institutions and improved governance have a substantial effect on mitigating environmental degradation. As a result, policymakers should emphasize increasing institutional quality and supporting good governance to better manage issues of urbanization. The BRI incorporates international cooperation and partnerships. Policymakers may collaborate to address urbanization's environmental concerns and encourage sustainable practices by sharing knowledge and best practices in sustainable development and environmental protection.

This study highlights the importance of policymakers establishing an appropriate balance between economic growth and protecting the environment. While infrastructure investment is vital for economic growth, it is critical to evaluate and minimize any negative environmental consequences. Policymakers can also use the study's findings to enhance public awareness and promote education about the possible effects of urbanization, as well as the importance of sustainability. This may involve initiatives and campaigns to encourage sustainable practices and minimize individual consumption patterns. The results demonstrated that renewable energy had a negative influence on eliminating carbon emissions. Policymakers can use these findings to encourage investment in renewable energy and transfer toward more environmentally friendly energy sources.

This study's contribution is to bridge a knowledge gap about the influence of urbanization on environmental degradation in BRI economies. Previous research has focused mostly on the BRI's economic and political implications, whereas this study offers light on the potential environmental impacts. This study also contributes to existing discussions on sustainable development by providing empirical findings on how to achieve economic growth while reducing environmental degradation. However, this study has some limitations. Only 64 BRI economies were included in the sample size due to data availability, and the analysis only limited at the years 2013 to 2021. To offer a greater understanding of the connection between urbanization and environmental deterioration in BRI economies, future studies may employ an extended period and a larger sample size. Furthermore, future studies can examine the various impacts of rural-urban migration and urbanization patterns on environmental degradation.

BRI	Belt and Road Initiative
CO2	Carbon Dioxide
GDP	Gross Domestic Product
GMM	Generalized Method of Moments
IEA	International Energy Agency
2SLS	Two-Stage Least Squares
WB	World Bank
IMF	International Monetary Fund
HCPC	Household Consumption per Capita
REE	Renewable Energy
SEC	Socioeconomic Conditions
URB	Urbanization
END	Environmental Degradation
INF	Infrastructure I
INQ	Institutional Quality
GLI	Globalization Index

Funding

The authors declare that no funds, grants, or other support were received during the preparation of this manuscript.

Competing Interests

The authors declare no competing interests. Ningyu Qian

Authors Contributions: Muhammad Suhrab, Chen Pinglu, Ningyu Qian

: Supervision; Validation, Conceptualization, Writing–review & editing.: Data curation–Software, Formal analysis, Results, Writing–review & editing.: Data curation, Resources, Validation, Results and discussion, Writing–review & and editing.

Ethics declarations

Not applicable.

Ethical approval and consent to participate

Not applicable.

Consent for publication

Not applicable

Data availability

All data generated or analyzed during this study are included in the published article.

Preprint Process

I have not submitted my manuscript to a preprint server before submitting it to Environmental Science and Pollution Research.

Adebayo, T. S., Agboola, M. O., Rjoub, H., Adeshola, I., Agyekum, E. B., & Kumar, N. M. (2021). Linking economic growth, urbanization, and environmental degradation in China: what is the role of hydroelectricity consumption? International journal of environmental research and public health, 18(13), 6975.
Adekoya, O. B., Ajayi, G. E., Suhrab, M., & Oliyide, J. A. (2022). How critical are resource rents, agriculture, growth, and renewable energy to environmental degradation in the resource-rich African countries? The role of institutional quality. Energy Policy, 164, 112888.
Ahakwa, I. (2023). The role of economic production, energy consumption, and trade openness in urbanization-environment nexus: a heterogeneous analysis on developing economies along the Belt and Road route. Environmental Science and Pollution Research, 30(17), 49798-49816.
Ajanaku, B. A., & Collins, A. R. (2021). Economic growth and deforestation in African countries: Is the environmental Kuznets curve hypothesis applicable? Forest Policy and Economics, 129, 102488.
Anwar, A., Ahmad, N., & Madni, G. R. (2020). Industrialization, freight transport and environmental quality: evidence from belt and road initiative economies. Environmental Science and Pollution Research, 27, 7053-7070.
Awad, A., Mallek, R. S., Ozturk, I., & Abdalla, Y. A. (2023). Infrastructure Development's role in environmental degradation in sub-Saharan Africa: Impacts and transmission channels. Journal of cleaner production, 137622.
Choudhury, R. N. (2023). Economic Implications of BRI. In China’s BRI in Different Regions of the World (pp. 34-45). Routledge.
Dagar, V., Khan, M. K., Alvarado, R., Rehman, A., Irfan, M., Adekoya, O. B., & Fahad, S. (2022). Impact of renewable energy consumption, financial development and natural resources on environmental degradation in OECD countries with dynamic panel data. Environmental Science and Pollution Research, 29(12), 18202-18212.
Gu, D., Andreev, K., & Dupre, M. E. (2021). Major trends in population growth around the world. China CDC weekly, 3(28), 604.
Haldar, S., & Sharma, G. (2022). Impact of urbanization on per capita energy use and emissions in India. International Journal of Energy Sector Management, 16(1), 191-207.
Hu, Z., & Khan, H. (2023). The effect of institutions and urbanization on environmental quality: evidence from the Belt and Road Initiative countries using dynamic panel models. Environmental Science and Pollution Research, 1-16.
Huh, H. S., & Park, C. Y. (2021). A new index of globalisation: Measuring impacts of integration on economic growth and income inequality. The World Economy, 44(2), 409-443.
Hussain, M., & Dogan, E. (2021). The role of institutional quality and environment-related technologies in environmental degradation for BRICS. Journal of cleaner production, 304, 127059.
Islam, M. M., Ali, M. I., Ceh, B., Singh, S., Khan, M. K., & Dagar, V. (2022). Renewable and non-renewable energy consumption driven sustainable development in ASEAN countries: do financial development and institutional quality matter? Environmental Science and Pollution Research, 29(23), 34231-34247.
Jafri, M. A. H., Liu, H., Majeed, M. T., Ahmad, W., Ullah, S., & Xue, R. (2021). Physical infrastructure, energy consumption, economic growth, and environmental pollution in Pakistan: an asymmetry analysis. Environmental Science and Pollution Research, 28, 16129-16139.
Kahouli, B., Miled, K., & Aloui, Z. (2022). Do energy consumption, urbanization, and industrialization play a role in environmental degradation in the case of Saudi Arabia? Energy Strategy Reviews, 40, 100814.
Khan, I., Han, L., Bibi, R., & Khan, H. (2022). Linking natural resources, innovations, and environment in the Belt and Road Initiative countries using dynamic panel techniques: the role of innovations and renewable energy consumption. Environmental Science and Pollution Research, 29(39), 59666-59675.
Lee, H. S., Arestis, P., Chong, S. C., Yap, S., & Sia, B. K. (2022). The heterogeneous effects of urbanisation and institutional quality on greenhouse gas emissions in Belt and Road Initiative countries. Environmental Science and Pollution Research, 29, 1087-1105.
Liu, X., Sun, T., & Feng, Q. (2020). Dynamic spatial spillover effect of urbanization on environmental pollution in China considering the inertia characteristics of environmental pollution. Sustainable Cities and Society, 53, 101903.
Losos, E. C., Pfaff, A., Olander, L. P., Mason, S., & Morgan, S. (2019). Reducing environmental risks from belt and road initiative investments in transportation infrastructure. World Bank Policy Research Working Paper(8718).
Lu, H., Liu, Y., Ali, A., Tian, R., Chen, Y., & Luo, Y. (2022). Empirical analysis of the impact of China–Japan–South Korea transportation infrastructure investment on environmental degradation and the validity of the environmental Kuznets curve hypothesis. Frontiers in Psychology, 13, 977466.
Muhammad, S., Long, X., Salman, M., & Dauda, L. (2020). Effect of urbanization and international trade on CO2 emissions across 65 belt and road initiative countries. Energy, 196, 117102.
Musa, K. S., Maijama’a, R., & Yakubu, M. (2021). The causality between urbanization, industrialization and CO2 emissions in Nigeria: Evidence from Toda and Yamamoto Approach. Energy Economics Letters, 8(1), 1-14.
Nathaniel, S. P., Nwulu, N., & Bekun, F. (2021). Natural resource, globalization, urbanization, human capital, and environmental degradation in Latin American and Caribbean countries. Environmental Science and Pollution Research, 28, 6207-6221.
Raihan, A., & Tuspekova, A. (2022). Dynamic impacts of economic growth, energy use, urbanization, tourism, agricultural value-added, and forested area on carbon dioxide emissions in Brazil. Journal of Environmental Studies and Sciences, 12(4), 794-814.
Raza, S. A., Qureshi, M. A., Ahmed, M., Qaiser, S., Ali, R., & Ahmed, F. (2021). Non-linear relationship between tourism, economic growth, urbanization, and environmental degradation: evidence from smooth transition models. Environmental Science and Pollution Research, 28, 1426-1442.
Sattar, A., Hussain, M. N., & Ilyas, M. (2022). An impact evaluation of belt and road initiative (BRI) on environmental degradation. Sage Open, 12(1), 21582440221078836.
Shittu, W., Adedoyin, F. F., Shah, M. I., & Musibau, H. O. (2021). An investigation of the nexus between natural resources, environmental performance, energy security and environmental degradation: Evidence from Asia. Resources Policy, 73, 102227.
Suhrab, M., Soomro, J. A., Ullah, S., & Chavara, J. (2023). The effect of gross domestic product, urbanization, trade openness, financial development, and renewable energy on CO2 emission. Environmental Science and Pollution Research, 30(9), 22985-22991.
Wang, B., Gong, S., & Yang, Y. (2023). Innovation capability, global cooperation, and sustainable development along the Belt and Road Initiative. Sustainable Development, 31(5), 3490-3512.
Wang, C., Lim, M. K., Zhang, X., Zhao, L., & Lee, P. T.-W. (2020). Railway and road infrastructure in the Belt and Road Initiative countries: Estimating the impact of transport infrastructure on economic growth. Transportation Research Part A: Policy and Practice, 134, 288-307.
Wang, Q., Wang, X., & Li, R. (2022). Does urbanization redefine the environmental Kuznets curve? An empirical analysis of 134 Countries. Sustainable Cities and Society, 76, 103382.
Wei, G., Bi, M., Liu, X., Zhang, Z., & He, B.-J. (2023). Investigating the impact of multi-dimensional urbanization and FDI on carbon emissions in the belt and road initiative region: Direct and spillover effects. Journal of cleaner production, 384, 135608.
Xu, Q., Khan, S., Zhang, X., & Usman, M. (2023). Urbanization, rural energy-poverty, and carbon emission: unveiling the pollution halo effect in 48 BRI countries. Environmental Science and Pollution Research, 30(48), 105912-105926.
Yang, X., & Khan, I. (2022). Dynamics among economic growth, urbanization, and environmental sustainability in IEA countries: the role of industry value-added. Environmental Science and Pollution Research, 29(3), 4116-4127.
Yasin, I., Ahmad, N., & Chaudhary, M. A. (2021). The impact of financial development, political institutions, and urbanization on environmental degradation: evidence from 59 less-developed economies. Environment, Development and Sustainability, 23, 6698-6721.
Zhang, Z., Zhao, Y., Cai, H., & Ajaz, T. (2023). Influence of renewable energy infrastructure, Chinese outward FDI, and technical efficiency on ecological sustainability in belt and road node economies. Renewable Energy, 205, 608-616.

No competing interests reported.

Green road to Sustainability: Impact of Urbanization on Environmental Degradation with Infrastructure Investment as Moderator in Belt and Road Initiative Economies

Status:

Version 1

Abstract

Figures

1. Introduction

2. Literature Review

2.1. Theoretical Review

2.2. Empirical Review

2.3. Research Gap and Hypothesis

3. Methodology

3.1. Data collection and description

3.2. Empirical Techniques and Econometric Model

4. Results

4.1. Impact of Urbanization and Infrastructure Investment on Environmental Degradation in BRI Economies

4.2. Discussion on Results

5. Conclusion

Abbreviations

Declarations

References

Additional Declarations

Status:

Version 1