Exploring the nexus between fiscal decentralization and ecological sustainability: a fresh perspective from the moderating role of geopolitical risk and updated international evidence.

Fiscal decentralization has been long employed to enhance the utilization of financial resources for sustainable development. Nevertheless, its effectiveness in limiting ecological degradation is ambiguous, especially when a country faces geopolitical risks. Different from previous works which separately examine the impacts of either fiscal decentralization or geopolitical risks on ecological sustainability, this research examines the moderating role of geopolitical risks on the non-linear relationship between fiscal decentralization and ecological footprints across different levels of environmental condition. An advanced panel quantile regression is applied to a sample of 23 advanced and emerging market economies from 1990 to 2018. The empirical results indicate that the nexus between revenue decentralization and ecological footprint follows an inverted U-shaped pattern at the 20th to 60th quantiles of ecological footprint. Meanwhile, the linkage between expenditure and ecological footprint reflects a U-shaped pattern across all quantiles. Notably, geopolitical risk strongly moderates the connection between fiscal decentralization and ecological footprint with the role being stronger in the case of revenue decentralization. This research provides valuable implementations to tailor policies for transferring revenue and expenditure responsibilities to sub-governmental bodies towards sustainability targets based on their current ecological conditions and contexts of geopolitical instability.

The influence of shadow economy, environmental policies and geopolitical risk on renewable energy: A comparison of high- and middle-income countries.

Given the alarming rate of climate change and environmental degradation, major countries are seeking ways to curtail environmental damage and attain sustainability in the future. In the quest for a green economy, countries are motivated to adopt renewable energy that can assist in resource conservation and efficiency. Accordingly, this study examines the diverse effects of the underground economy, environmental policy strictness, geopolitical risk, gross domestic product, carbon emissions, population, and oil prices on renewable energy for 30 high- and middle-income countries from 1990 to 2018. The empirical outcomes based on quantile regression document significant variations across two country groups. For instance, for high-income countries, the shadow economy has a detrimental effect across all quantiles but it is statistically significant at the top quantiles. Nonetheless, the effect of the shadow economy on renewable energy is detrimental and significant statistically across all quantiles for middle-income countries. In the context of environmental policy stringency, the effect is positive across both country groups, though there is heterogeneity in outcomes. Geopolitical risk has a positive influence on the deployment of renewable energy for high-income countries but negatively impacts renewables for middle-income countries. As far as policy suggestions are concerned, the policymakers of both high- and middle-income countries need to take steps to constrain the growth of the shadow economy by adopting effective policy strategies. Policies need to be implemented for middle income-countries to reduce the unfavorable effect of geopolitical uncertainty. The findings of this study contribute to a better and more precise understanding of factors shaping the role of renewables whereby the energy crisis would be mitigated.

The role of energy security and economic complexity in renewable energy development: evidence from G7 countries.

The development of renewable energy is receiving more attention as a result of environmental degradation and energy instability. Despite a large literature on the nexus between energy security, economic complexity, and energy consumption, there are few attempts to analyze the impact of energy security and economic complexity on renewable energy. This paper examines the heterogeneous impacts of energy security and economic complexity on renewable energy in G7 countries from 1980 to 2017. The estimated results obtained from quantile regression show that energy insecurity is a driving force of renewable sources although its impact is heterogeneous across the distribution of renewables. In contrast, economic complexity hampers the development of renewable energy with the size of impact decreasing as the renewable energy sector progresses. In addition, we find that income positively affects renewable energy while the role of trade openness varies across the distribution of renewable energy variable. These findings lead to valuable policy implications for G7 countries to develop renewable energy.

Impact of economic policy uncertainty, geopolitical risk, and economic complexity on carbon emissions and ecological footprint: an investigation of the E7 countries.

There is a plethora of studies on the energy-consumption-environmental-quality nexus. Nevertheless, empirical research on the impact of global uncertainties on environmental quality is lacking. This study contributes to the literature by examining the impact of economic policy uncertainty (EPU), geopolitical risk (GPR), and economic complexity on the ecological footprint and carbon emissions of E7 economies for the period 1995-2018. Our empirical results indicate a long-term relationship between economic complexity, EPU, GPR, energy consumption, and two environmental quality indicators, carbon dioxide emissions and ecological footprint. In the long run, a divergence from disequilibrium takes 3 years to return to the equilibrating position. The environmental effects of key determinants are different in terms of direction, magnitude, and time span. Specifically, an inverted U-shape describes the relationship between economic complexity and environmental degradation in the long-term only, which confirms the environmental Kuznets curve (EKC) hypothesis. The environmental effects of EPU and GPR are harmful in the short run but prove to be beneficial in the long run. Higher energy consumption significantly degrades environment quality as expected. Based on these findings, the paper provides several useful suggestions for policymakers in the context of E7 countries.

The shadow economy-environmental quality nexus in OECD countries: empirical evidence from panel quantile regression.

This study examines the heterogenous impact of shadow economy on the ecological footprint. We apply the panel quantile regression to a panel dataset of 32 OECD countries from 1990 to 2015. The estimation results indicate that the shadow economy-ecological footprint nexus follows an inverted U-shaped pattern. Initially, the higher size of the informal economy leads to more ecosystem degradation. When the shadow economy increases to certain thresholds, its environmental impact reverts to benefit. Such threshold changes with the evolution of the ecological footprint. Specifically, it first rises then decreases along with the degradation of the ecosystem. Moreover, the heterogeneous panel causality test reports the one-way directional running from the shadow economy to the ecological footprint in OECD countries. Likewise, environmental effects of other control variables, including trade openness, energy intensity, renewable energy, and income, are also not homogeneous across various levels of the ecological footprint. The significant and heterogeneous relationships between ecological footprint and its determining factors provide insightful implications for governments in tailoring environmental regulations upon different ecological conditions.

The nexus between environmental regulation and ecological footprint in OECD countries: empirical evidence using panel quantile regression.

Environmental regulation is an important tool for policymakers to achieve environmental goals. To better understand the role of environmental regulation in protecting the ecosystem, this paper offers a new perspective on exploring the heterogeneous impact of environmental policy stringency on the ecological footprint in 27 OECD countries during the period 1990-2015. An advanced economic method, panel quantile regression, is conducted to deal with the non-normality and unobserved individual heterogeneity across countries. The estimation outcomes indicate that the environmental effect of policy stringency is heterogeneous along the quantiles and different between the ecological footprint of consumption and production. The beneficial role of environmental regulation in reducing consumption ecological footprint is achieved at quantiles under 80th but the harmful effect starts occurring at extreme high quantiles. In contrast, environmental policy stringency plays a consistently useful role in mitigating production ecological footprint. In addition, the results disclose that the effects of other driving factors such as international trade, energy efficiency, renewable energy, and income are heterogeneous at different quantiles of ecological footprint. These findings help explain the inconsistencies in previous empirical studies on the nexus between environmental regulation and environmental quality in OECD countries. Finally, the current study gives policymakers useful recommendations on how to strengthen the beneficial impacts of environmental policies on the ecosystem.

Determinants of ecological footprint in OCED countries: do environmental-related technologies reduce environmental degradation?

The world is in a clash between the perspectives of economic expansion and sustainable environment. The high pace of technological progress opens space for fostering economic growth but at the same time, it creates a big dilemma for humans in protecting the environmental quality. The environmentally specific technologies are expected to help human beings to achieve dual objectives of economic prosperity and environmental sustainability. Despite its importance, attention to the role of environmental-related technologies in reducing environmental degradation is limited. This paper, therefore, intends to discover the impact of environmental-related technologies on the ecological footprint for 20 OECD from 1990 to 2015. The results endorse a long-run relationship between ecological footprint and green technologies, renewable energy, international trade, energy intensity, and real income. Environmental-related technologies and renewable energy consumption are found to be impetuous to sustainable development. The study provides relevant implications for policymakers to support the development and adoption of green technologies.

Environmental quality and the role of economic policy uncertainty, economic complexity, renewable energy, and energy intensity: the case of G7 countries.

This study explores the environmental impacts of economic policy uncertainty, economic complexity, renewable energy, and energy intensity on the countries in the Group of Seven (G7) countries. To this end, the study employs fully modified ordinary least squares and a fixed effects model with Driscoll and Kraay, Rev Econ Stat 80:549-560, (1998) robust standard errors and a panel dataset from 1997 to 2015. The findings demonstrate a long-term relationship between the variables of interest and carbon dioxide emissions and the ecological footprint. Specifically, high energy intensity increases environmental pollution while high economic policy uncertainty and renewable energy reduces environmental degradation. The environmental Kuznet curve of economic complexity and environmental quality holds for G7 countries. Moreover, economic policy uncertainty strongly moderates the environmental effect of renewable energy, economic complexity, and energy intensity. Specifically, although economic policy uncertainty amplifies the beneficial environmental effects of renewable energy and economic complexity, it enlarges the harmful effect of energy intensity on environmental quality. These empirical outcomes allow us to draw useful implications for policy makers to mitigate the environmental degradation.

The complementarity of income equalization and innovation for more effective emission reduction.

This study examines the effects of income inequality and innovation on environmental quality, conditional on the level of each factor. We apply system generalized method of moments to a panel dataset of 91 countries from 1971 to 2015. The estimation results consistently reveal that although income inequality and innovation significantly contribute to better environmental quality, the effect of one factor largely depends on the evolution of the other. Specifically, the beneficial impact of income equality on environmental quality can only be achieved at a high level of innovation. In the same way, innovation is only an effective tool for a nation to reduce environmental degradation when income is fairly distributed among its citizens. This means that more equitable income distribution and higher innovative capacities are two interrelated prerequisites that must both be in place for a country to actualize their beneficial environmental impacts. Overall, our findings shed new light on the relationship between income inequality, innovation, and environmental quality, and they provide relevant implications for policymakers with regard to tackling the dual tasks of reducing inequality and pollution.