<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The aim of this study is to test the possible non-linear effect of environmental policy stringency on carbon emissions and thus make policy recommendations for emission reduction. For this purpose data for the period 1995–2015 for selected emerging countries were used. According to the findings obtained from fixed-effects panel threshold regressions environmental policy stringency has no significant effect on the relationship between gross domestic product <italic>per capita</italic> and carbon dioxide emissions. However, it has statistically significant effect if the share of the service sector and the foreign direct investment are taken as regime-dependent variables. Accordingly, in the high policy stringency regime an increase in the share of the service sector and the foreign direct investment reduce emission levels. In the case of using market-based environmental regulations the threshold effect faced by foreign direct investment is much more pronounced. In order to reduce carbon emissions it is recommended to increase environmental policy stringency, especially in market-based tools.</p>
</abstract>

The aim of this study is to test the possible non-linear effect of environmental policy stringency on carbon emissions and thus make policy recommendations for emission reduction. For this purpose data for the period 1995–2015 for selected emerging countries were used. According to the findings obtained from fixed-effects panel threshold regressions environmental policy stringency has no significant effect on the relationship between gross domestic product per capita and carbon dioxide emissions. However, it has statistically significant effect if the share of the service sector and the foreign direct investment are taken as regime-dependent variables. Accordingly, in the high policy stringency regime an increase in the share of the service sector and the foreign direct investment reduce emission levels. In the case of using market-based environmental regulations the threshold effect faced by foreign direct investment is much more pronounced. In order to reduce carbon emissions it is recommended to increase environmental policy stringency, especially in market-based tools.

Effectiveness of environmental policies on carbon emissions: A panel threshold analysis

Economics and Business Review

This work is licensed under the Creative Commons Attribution 4.0 International License.

The aim of this study is to test the possible non-linear effect of environmental policy stringency on carbon emissions and thus make policy recommendations for...

Effectiveness of environmental policies on carbon emissions: A panel threshold analysis

Published Online: Oct 29, 2022

Page range: 82 - 108

Received: Apr 30, 2022

Accepted: Sep 16, 2022

DOI: https://doi.org/10.18559/ebr.2022.3.5

Keywords
carbon emissions, environmental policy stringency, threshold models

© 2022 Hale Akbulut, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Effectiveness of environmental policies on carbon emissions: A panel threshold analysis

Published Online: Oct 29, 2022

Page range: 82 - 108

Received: Apr 30, 2022

Accepted: Sep 16, 2022

DOI: https://doi.org/10.18559/ebr.2022.3.5

Keywordscarbon emissions, environmental policy stringency, threshold models

© 2022 Hale Akbulut, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
carbon emissions, environmental policy stringency, threshold models