Rule of law and CO2 emissions: A comparative analysis across 65 belt and road initiative(BRI) countries

Abstract

This article mainly compares different effects of political stability, corruption control and rule of law on CO2 emissions across 65 belt and road initiative countries from 2000-2016. We utilize across low income (LI), lower middle(LM), upper middle(UM) and high income (HI)countries. The results show that institutional factors such as political stability, corruption control and rule of law are highly important in lowering carbon emissions and improving environmental quality. The interacting effect between political stability and rule of law can reduce CO2 emissions. Foreign direct investment (FDI) shows a heterogeneous effect on carbon emissions across different income groups, confirming “Pollution Haven” and “Pollution Halo” hypothesis. Trade openness reduces CO2 emissions in low income and high income countries, which increases CO2 emissions in lower-middle income countries. It is important to enhance the enforcement of environmental law to decrease CO2 emissions.