What drives natural capital in E7 and G7 economies? The roles of energy transition and urbanization

As the world progresses toward low-carbon technologies that rely primarily on minerals, there is a need for increased mining to solve environmental concerns in a manner that is both sustainable and climate-conscious. Given this background, this study examines the determinants of mineral exports (a measure of natural capital) in E7 and G7 economies from 1990 to 2019. Utilizing several different estimation techniques, the paper finds that country size (measured by gross domestic product) and de-urbanization decrease mineral exports in G7 economies. In contrast, the energy transition from non-renewable to renewable sources promotes mineral exports in the G7 countries. Regarding E7 economies, urbanization is negatively related to mineral exports but financial development and foreign direct investments promote mineral exports. Therefore, E7 and G7 economies should emphasize sustainable mining markets by considering different policy implications.