Impact of environmental policy stringency on sectoral GHG emissions: evidence from Finland and Sweden by nonlinear quantile-based methods


Kartal M. T., AYHAN F., Ulussever T.

INTERNATIONAL JOURNAL OF SUSTAINABLE DEVELOPMENT AND WORLD ECOLOGY, vol.31, no.7, pp.848-860, 2024 (SCI-Expanded) identifier identifier

  • Publication Type: Article / Article
  • Volume: 31 Issue: 7
  • Publication Date: 2024
  • Doi Number: 10.1080/13504509.2024.2339509
  • Journal Name: INTERNATIONAL JOURNAL OF SUSTAINABLE DEVELOPMENT AND WORLD ECOLOGY
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Scopus, Academic Search Premier, IBZ Online, PASCAL, Agricultural & Environmental Science Database, BIOSIS, CAB Abstracts, Environment Index, Geobase, Greenfile, Index Islamicus, Public Affairs Index, Veterinary Science Database
  • Page Numbers: pp.848-860
  • Azerbaijan State University of Economics (UNEC) Affiliated: No

Abstract

The growing societal concern regarding environmental matters has led to the implementation of many environmental measures intended to protect the environment and address global warming by lessening emissions and mitigating climate change. In line with this movement, this study scrutinizes the impact of these environmental measures on greenhouse gas (GHG) emissions to analyze the cases of Finland and Sweden. More specifically, the study employs the Environmental Policy Stringency (EPS) index as a proxy for environmental measures, explores sector-specific GHG emissions by employing nonlinear quantile-based methodologies (including quantile-on-quantile regression and Granger causality-in-quantiles methods as the primary model and quantile regression for robustness checking) spanning the period from 1991/Q1 to 2020/Q4. The findings show that: (i) EPS lessens GHG emissions from fuel exploitation, industrial combustion, and the power industry sector at lower and middle quantiles in Finland and Sweden; (ii) EPS decreases GHG emissions from processes, transportation, and waste sectors in Finland but increases them in Sweden at higher quantiles; (iii) EPS leads to an increase in GHG emissions from the agriculture and construction sectors at higher quantiles; (iv) EPS has a causal effect on sector-specific GHG emissions across different quantiles; (v) the robustness of the findings is largely confirmed. Hence, the study underscores the varying impacts of EPS on sectoral GHG emissions based on quantiles, sectors, and countries, emphasizing the need for policymakers to adopt environmental policies to comprise these differences and adjust the policy framework accordingly.