Towards Sustainable Policy-Making in NATO: The Environmental and Economic Implications of CO2 Emissions and Military Spending

Abstract

This study analyses the interrelationships among CO2 emissions, ecological footprint, economic growth, military expenditures, and industrial development in NATO countries between 1990 and 2022. A GMM-based panel vector autoregression (PVAR) approach is employed to capture long-term dynamics. The results reveal that CO2 emissions, economic growth, and military spending significantly increase the ecological footprint. Bidirectional causality is observed between CO2 emissions and economic development, as well as between economic development and military expenditures, while other variables display unidirectional relationships. These findings emphasize the critical need for renewable energy adoption, green technology investments, and sustainable military and economic policies in NATO countries.