Sustainability Policy Uncertainty, Energy Transition, and Carbon Intensity: Implications for SDG 7 and SDG 13
SUSTAINABLE DEVELOPMENT, 2026 (SSCI, Scopus)
- Publication Type: Article / Article
- Publication Date: 2026
- Doi Number: 10.1002/sd.71507
- Journal Name: SUSTAINABLE DEVELOPMENT
- Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, IBZ Online, ABI/INFORM, Environment Index, Geobase, Greenfile, Index Islamicus, Political Science Complete, Public Affairs Index, Political Science Abstract (IPSA), Natural Science Collection (ProQuest), Social Science Premium Collection (ProQuest), Business Source Ultimate (EBSCO), Materials Science & Engineering Collection (ProQuest), Political Science Database (ProQuest), Sociology Source Ultimate (EBSCO), Technology Collection (ProQuest)
- Azerbaijan State University of Economics (UNEC) Affiliated: Yes
Abstract
This study investigates how Environmental, Social, and Governance Uncertainty (ESGU) relates to carbon intensity across 24 economies observed annually from 2003 to 2024, a question situated at the intersection of Sustainable Development Goals 7 and 13. ESG-related uncertainty has been studied mainly in financial markets, yet whether it shapes aggregate decarbonization outcomes and through which channel has remained largely unexamined. The empirical design combines two-way fixed-effects regressions with Driscoll-Kraay standard errors, a formal mediation test based on Sobel statistics and bias-corrected bootstrap intervals, and a cross-sectionally augmented ARDL specification that separates long-run from short-run dynamics. Carbon intensity, the renewable electricity share, and the ESGU index are compiled from openly accessible databases, and every series is documented at source to support replication. The estimates indicate that sustainability policy uncertainty is associated with carbon intensity primarily through the energy-transition channel rather than through a direct effect. Higher ESGU coincides with a larger renewable electricity share (a = 0.188, p < 0.10), and a larger renewable share is in turn associated with lower carbon intensity (b = -0.168, p < 0.01); the resulting indirect path is statistically robust (Sobel z = -3.46, p = 0.001; bootstrap 95% CI [-0.048, -0.016]) and accounts for roughly 47% of the total association. Renewable capacity does not significantly moderate the relationship, whereas trade openness does, and the direction of these conditioning effects departs from prior expectations grounded in firm-level evidence. By moving ESGU analysis from financial markets to economy-wide decarbonization and by isolating renewable electricity as the operative transmission mechanism, the study reframes regulatory predictability and clean-energy deployment as complementary rather than competing instruments for SDG 7 and SDG 13.