Abstract

This study investigates the relationships among military expenditure, economic growth, energy consumption, and carbon dioxide (CO2) emissions using panel data for eight Central and Eastern European countries over the period 2000–2023. The analysis employs the Pooled Mean Group Autoregressive Distributed Lag (PMG-ARDL) estimator to examine both the short-run and long-run dynamics. To ensure the robustness of the findings, the CS-ARDL, Common Correlated Effects Mean Group (CCEMG), and panel FMOLS estimators are additionally applied. The results of the Pedroni, Kao, and Johansen–Fisher panel cointegration tests provide robust evidence of cointegration, confirming the existence of a stable long-run equilibrium relationship among the variables. The long-run estimates indicate that military expenditure and economic growth contribute to lower CO2 emissions, whereas higher energy consumption increases environmental degradation. In the short run, military expenditure has no statistically significant effect on CO2 emissions, suggesting that its environmental implications emerge only over a longer time horizon. These findings imply that strategically directed investments in the defense sector, particularly those promoting environmentally friendly technologies, energy efficiency, and technological innovation, can support the alignment of national security objectives with environmental sustainability. The results provide important policy implications for Central and Eastern European countries, highlighting that coordinated policies promoting cleaner energy use, sustainable economic growth, and environmentally conscious defense modernisation can contribute to long-term environmental and economic sustainability.

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