Disentangling the causal structure behind environmental regulation

Abstract

Determinants of environmental regulation have been identified in different studies. The present paper takes the analysis of environmental policy determinants one step further by also studying the interaction effects between the determinants. In this article we seek to disentangle the causal structure behind environmental regulations with the help of structural equation modelling for a data set of 47 countries. Green advocacy and governance capacity come out as the main structural determinants of environmental regulation quality. Internet access is found to have a positive influence on environmental regulation through green advocacy and governance capacity. The influence of green advocacy and governance capacity on international environmental governance is through national environmental policy and not the other way, while international environmental governance is influenced by factors outside the scope of this paper. We also find that green advocacy depends more on the presence of a competitive green industry than on environmental activism, with respect to the influence on environmental policy making. Statistically, 92% of the variance of environmental policy output could be explained by our structural model, which is very high for a model incorporating only structural factors.