Impact of governance quality, population and economic growth on greenhouse gas emissions: An analysis based on a panel VAR model

Abstract

Unlike the previous literature on climate change, this study employed the panel vector autoregressive model to examine the impact of population growth, governance quality, and economic growth on global warming. Moreover, we used the impulse response function tool, which was developed in the same context, to better understand the reaction of the main variables of interest, per capita greenhouse gas (GHG) emissions, aftershocks on population change, governance quality, and economic growth variables. Finally, the analysis was completed by the variance decomposition of all variables. These analyses were conducted for the 33 most polluting countries in terms of GHG from 1996 to 2019. The results show that both population growth and economic growth have a positive and significant influence on climate change and can strongly explain the gradual rise in Earth's temperature. Our empirical results show that there is a negative and significant relationship between the quality of governance and GHG emissions. The results show that there is a bidirectional causality between GHG emissions, population and economic growth. Based on the findings, this study proposes several policy recommendations.