The Heterogeneity Research of the Impact of EPU on Environmental Pollution: Empirical Evidence Based on 15 Countries

Ying Chen,Li Wang,Xiaoqian Shen

doi:10.3390/su13084166

Abstract

While economic growth has been the main goal of countries around the world, environmental problems such as air pollution have also arisen. Since the increase in economic uncertainty is limiting production capacity and consumers’ marginal propensity to consume, which reduces CO2 emissions, economic policy uncertainty has become one of the most important factors affecting CO2 emissions. COVID-19 has demonstrated that economic policy uncertainty reduces the enthusiasm of market participants, which, in turn, reduces energy demand and CO2 emissions. In order to further study the impact of economic policy uncertainty on air pollution, this study uses a panel model to empirically test the data for a sample of 15 countries covering the period from 1997 to 2019. According to the empirical results, we find that the economic policy uncertainty has a significant negative impact on per capita CO2 emissions. That is, the higher the uncertainty of economic policy, the lower the per capita CO2 emissions of countries. What’s more, this negative effect is larger in emerging market countries than in advanced countries.

Highlights

Pollution has become one of the serious problems that need to be solved urgently in the world
Equation (1), we find that the increment of economic policy uncertainty index has a significant negative impact on per capita CO2 emissions, i.e., the higher the economic policy uncertainty, the lower the per capita CO2 emissions of each country
In order to further verify whether the relationship between economic policy uncertainty index and per capita CO2 emissions is different between developing and advanced countries, we add an interaction term to the model in which economic policy uncertainty index and economic development level are multiplied

Summary

Introduction

Pollution has become one of the serious problems that need to be solved urgently in the world. Pollution is a serious threat to human health and has a significant impact on the national economy (Chang et al [1]). Since the 1990s, China, India, and other emerging market countries have experienced rapid economic growth. Pollution has become an important problem to these countries (Zheng and Kahn [2]). The enterprise is one of the main bodies of pollution control, whose cost and benefit of environmental protection have great uncertainty (Dietz and Fankhauser [3]). The uncertainty of macroeconomic policy will make enterprises reduce investment (Bloom [4])

Methods

Results

Discussion

Conclusion