DOES PRODUCTIVE STRUCTURE MATTER? NATURAL RESOURCE EXPLOITATION AND GREENHOUSE GAS EMISSIONS IN BRAZIL

Daniel Caixeta; Michele Polline Veríssimo

Todos os Trabalhos

Trabalho

Título do Trabalho

DOES PRODUCTIVE STRUCTURE MATTER? NATURAL RESOURCE EXPLOITATION AND GREENHOUSE GAS EMISSIONS IN BRAZIL

Autores

Daniel Caixeta
Michele Polline Veríssimo

Modalidade

Artigo (Público Geral/Não Associados AKB) / Full papers (Non AKB members)

Área temática

Área 8. Economia Ecológica, Mudança Climática e Sustentabilidade

Data de Publicação

26/10/2026

País da Publicação

Brasil

Idioma da Publicação

pt-BR

Página do Trabalho

https://www.even3.com.br/anais/akb2026-697763/1574253-does-productive-structure-matter-natural-resource-exploitation-and-greenhouse-gas-emissions-in-brazil

ISBN

978-65-272-2867-7

Palavras-Chave

environmental degradation, natural resources exploitation, neoextractivism, productive structure

Resumo

Introduction Since the 2000s, the Brazilian economy has been marked by increasing reliance on the production and export of primary commodities, alongside the declining relative participation of manufactured goods, especially those with higher technological intensity (Nassif and Castilho, 2020). Although this trajectory may have supported short-term economic growth, it has reinforced regressive specialization, with limited long-term effects on productivity, income generation and structural transformation (Bresser-Pereira, 2008). In this sense, the Brazilian trajectory can be interpreted as part of a broader Latin American pattern often described as neo-extractivism, a growth strategy based on the large-scale exploitation and export of natural resources, frequently associated with commodity dependence, socio-environmental conflicts and weak productive diversification (Svampa, 2019). In Brazil, this issue is particularly relevant because natural resource exploitation is closely connected to land-use change, deforestation, agricultural expansion, mining, fossil fuel extraction and other degrading processes. Thus, the environmental consequences of Brazil’s productive specialization cannot be understood only as a matter of economic growth, but also as a result of the material and sectoral composition of the economy. This paper investigates the long-run relationship between natural resource exploitation and environmental degradation in Brazil from 1990 to 2023. Environmental degradation is measured by greenhouse gas emissions, while natural resource exploitation is proxied by domestic extraction, both in aggregate terms and disaggregated into biomass, metal ores, non-metallic minerals and fossil fuels. The central research question is whether natural resource exploitation worsens environmental quality, measured by higher greenhouse gas emissions, in the long run and whether this effect depends on the productive structure in which extraction occurs. Using Autoregressive Distributed Lag models, the study assesses: (i) whether domestic extraction increases greenhouse gas emissions; (ii) whether this effect differs according to the type of resource extracted; and (iii) whether a higher manufacturing share in GDP mitigates the environmental impact of resource exploitation. The paper is guided by three hypotheses: natural resource exploitation has a positive long-run effect on emissions; this effect is heterogeneous across resources; and a more industrially dense productive structure can reduce, although not eliminate, the environmental pressure associated with resource exploitation. Material and Methods This paper estimates the long-run relationship between natural resource exploitation and greenhouse gas emissions in Brazil from 1990 to 2023. The empirical strategy is based on Autoregressive Distributed Lag models (ARDL), following Pesaran and Shin (1999) and Pesaran, Shin and Smith (2001). This approach is suitable because it allows the estimation of long-run relationships in relatively small time-series samples with variables integrated of different orders, provided that none is integrated of order two. It also distinguishes long-run effects from short-run dynamics, which is consistent with the paper’s focus on the persistent environmental effects of natural resource exploitation. The dependent variable is greenhouse gas emissions, measured as the sum of carbon dioxide, methane and nitrous oxide emissions in CO2 equivalent. The explanatory variable of interest is natural resource exploitation, proxied by domestic extraction, considered both in aggregate terms and disaggregated into biomass, metal ores, non-metallic minerals and fossil fuels. Data on domestic extraction are obtained from the United Nations Environment Programme, International Resource Panel, Global Material Flows Database. The remaining variables are obtained from the World Bank’s World Development Indicators. The control variables include real GDP per capita, used to capture the scale effect of economic growth on emissions, and trade openness, included to account for the role of external integration in shaping Brazil’s environmental performance. In the expanded specifications, the share of manufacturing value added in GDP captures the productive structure of the economy. Following the structure proposed in the empirical strategy, the paper estimates two sets of models, referred to as restricted and expanded models, in ten different specifications according to the natural resource variable considered. The restricted models (five specifications) estimate the direct long-run effect of natural resource exploitation on greenhouse gas emissions. A positive coefficient is expected, indicating that greater domestic extraction is associated with higher long-run emissions. The expanded models (also five specifications) include interaction terms between natural resource exploitation and the share of manufacturing value added in GDP. These specifications assess whether productive structure mediates the environmental impact of natural resource exploitation. The central expectation is that the direct coefficient of natural resource exploitation remains positive, while the interaction term is negative. This would indicate that, although resource extraction increases emissions, a more industrially dense productive structure may reduce the magnitude of this effect. Thus, the expanded models test whether the environmental consequences of resource exploitation depend not only on the amount and type of resources extracted, but also on the broader productive structure in which extraction occurs. The two main specifications are as follows: Restricted Models (specifications 1 to 5) ?GEE=a_0+a_1 T+ ß_1 ?GEE?_(t-1)+ß_2 ?NRi?_(t-1)+ß_3 ?PIBpc?_( t-1)+ß_4 ?TradeOpen?_( t-1)+?_(i=0)^n¦?_1 ??GEE?_( t-i)+?_(i=0)^p¦?_2 ?RNi?_( t-i)+?_(i=0)^q¦?_3 ??PIBpc?_( t-i)+ ?_(i=0)^r¦?_4 ??TradeOpen?_( t-i)+e_t] Expanded Models (specifications 6 to 10) ?GEE=a_0+a_1 T+ ß_1 ?GEE?_(t-1)+ß_2 ?NRi?_(t-1)+ß_3 ?NRi*VAmanuf?_( t-1)+ß_4 ?PIBpc?_( t-1 )+ß_5 ?TradeOpen?_( t-1)+?_(i=0)^n¦?_1 ??GEE?_( t-i)+?_(i=0)^p¦?_2 ??RNi?_( t-i)+?_(i=0)^q¦?_3 ??NRi*VAmanuf?_( t-1)+?_(i=0)^r¦?_4 ??PIBpc?_( t-i)+?_(i=0)^s¦?_5 ??TradeOpen?_( t-i)+e_t where VAmanuf_t denotes the share of manufacturing value added in GDP and NR_t×VAmanuf_tis the interaction term between natural resource exploitation and productive structure. Together, these two sets of models allow the paper to test three empirical questions: whether natural resource exploitation increases greenhouse gas emissions in Brazil; whether this effect differs according to the type of resource extracted; and whether the productive structure, measured by the manufacturing share in GDP, mitigates the long-run environmental impact of domestic extraction. Preliminary results The estimated models present satisfactory diagnostic properties. The bounds tests indicate long-run relationships among the variables in all specifications, with F-statistics above the upper critical bounds. The error correction terms are negative and statistically significant, confirming the adjustment of short-run disequilibria toward long-run equilibrium. In addition, the models show no evidence of serial autocorrelation, according to the LM tests, while the CUSUM and CUSUMSQ tests indicate parameter stability. Overall, these results suggest that the ARDL specifications are well adjusted and suitable for interpreting the long-run coefficients. In line with the expected signs, the restricted models show that natural resource exploitation has a positive long-run effect on greenhouse gas emissions in Brazil. In the specification using total domestic extraction, a 1% increase in total natural resource extraction is associated with a 0.22% increase in long-run emissions. When domestic extraction is disaggregated by material category, the strongest effect is found for biomass: a 1% increase in biomass extraction is associated with a 0.35% increase in emissions. Non-metallic minerals also present a positive and statistically significant coefficient, although with lower magnitude. These results support the hypothesis that the material basis of the Brazilian economy is directly associated with environmental degradation, particularly through resource-intensive activities connected to land use, agriculture, infrastructure and construction. The expanded models provide the main contribution of the paper. When the interaction between natural resource exploitation and the share of manufacturing value added in GDP is included, the coefficients of natural resource extraction remain positive, but their magnitudes decrease. At the same time, the interaction terms between natural resource exploitation and manufacturing share are negative and statistically significant across the specifications. This finding suggests that productive structure matters: although domestic extraction increases greenhouse gas emissions, a higher manufacturing share in GDP appears to mitigate the environmental impact of resource exploitation. This result should not be interpreted as evidence that industrialization automatically solves environmental degradation. Rather, it indicates that the environmental effect of natural resource exploitation depends on the type of productive structure in which extraction takes place. In a more reprimarized economy, resource extraction tends to be more directly converted into environmental degradation. In contrast, an economy with greater industrial density may be better able to process, transform and organize resource use in ways that reduce the emissions intensity associated with extraction. The control variables also present relevant results. GDP per capita has a positive long-run effect on greenhouse gas emissions, indicating that economic growth in Brazil has historically been associated with higher environmental pressure. Trade openness also shows positive coefficients, suggesting that Brazil’s external integration has not contributed to reducing emissions, but rather has reinforced an environmentally intensive pattern of specialization. Taken together, the results indicate that greenhouse gas emissions in Brazil are not only a consequence of economic scale, but also of the country’s productive and trade structure. References: Bresser-Pereira, L. C. (2008). The Dutch disease and its neutralization: A Ricardian approach. Brazilian Journal of Political Economy, 28(1), 47–71. Nassif, A., & Castilho, M. R. (2020). Trade patterns in a globalised world: Brazil as a case of regressive specialisation. Cambridge Journal of Economics, 44(3), 671–691. Pesaran, M. H., & Shin, Y. (1999). An autoregressive distributed-lag modelling approach to cointegration analysis. In S. Strøm (Ed.), Econometrics and economic theory in the 20th century: The Ragnar Frisch Centennial Symposium. Cambridge University Press. Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326. Svampa, M. (2019). Neo-extractivism in Latin America: Socio-environmental conflicts, the territorial turn, and new political narratives. Cambridge University Press. https://doi.org/10.1017/9781108707121

Título do Evento: XIX Encontro da Associação Keynesiana Brasileira
Cidade do Evento: São Cristóvão
Título dos Anais do Evento: Anais do XIX Encontro da Associação Keynesiana Brasileira
Nome da Editora: Even3
Meio de Divulgação: Meio Digital

Como citar

CAIXETA, Daniel; VERÍSSIMO, Michele Polline. DOES PRODUCTIVE STRUCTURE MATTER? NATURAL RESOURCE EXPLOITATION AND GREENHOUSE GAS EMISSIONS IN BRAZIL.. In: Anais do XIX Encontro da Associação Keynesiana Brasileira. Anais...Aracaju(SE) Hotel Del Mar, 2026. Disponível em: https//www.even3.com.br/anais/akb2026-697763/1574253-DOES-PRODUCTIVE-STRUCTURE-MATTER-NATURAL-RESOURCE-EXPLOITATION-AND-GREENHOUSE-GAS-EMISSIONS-IN-BRAZIL. Acesso em: 06/11/2026