The nexus of carbon emissions, oil price volatility, and human capital efficiency

The corporate sector's active engagement is vital for achieving a net-zero future. It entails a sizeable investment in human capital to foster more conscious efforts to limit carbon emissions. Therefore it is critical to evaluate the nexus between carbon emissions and human capital efficiency. This paper analyzes the link between human capital efficiency and carbon emissions using a comprehensive sample of 5740 firms across eight countries spanning over ten years. Our findings show a negative relationship between investment in human capital and carbon emissions. We emphasize that optimal human capital efficiency can help limit emissions by fostering the transitions to renewable energy sources and the development of cognitive appreciation. The results remained robust for periods marked by booming and receding oil prices. These findings have important implications for optimizing firm performance while preserving sustainable development goals.

Automated summary

The active engagement of the corporate sector is crucial for achieving a net-zero future. This study finds a negative relationship between investment in human capital and carbon emissions, highlighting the importance of optimizing human capital efficiency in limiting emissions and promoting sustainable development goals.