Environmental policy effectiveness on residential natural gas use in OECD countries

Abstract

This study evaluates the effectiveness of the environmental policy on residential natural gas use (RNGU) incorporating the role of economic, demographic and environmental factors in the context of Organization for Economic Co-operation and Development (OECD) countries. To this end, the study applies the Cross-Sectional Autoregressive Distributed Lags (CS-ARDL) approach to analyse panel time-series data ranging from 1980 to 2016. The analysis demonstrates the environmental policy is an effective tool in reducing RNGU. This study also finds that energy price and income negatively and positively influence RNGU respectively in the long run. Demographic factors e.g. population, population density and elderly population ratio augment RNGU in the long run. A rise in temperature is inversely associated with RNGU in the long run. Based on the empirical evidence this study emphasizes on the proper implementation of the undertaken environmental policies towards the sustainable development agendas.