Valuing the greenhouse effect of political risks: the global case

Abstract

ABSTRACT To empirically verify whether political risks affect global carbon dioxide (CO2) emissions, this study investigates the effect of political risks on countries’ CO2 emissions by employing a panel dataset of 66 countries over the period 2003–2018. Furthermore, this study also separately tests three major effects (i.e., scale effect, technique effect, and structure effect) of political risks on countries’ CO2 emissions. Considering regional heterogeneity, this study conducts an asymmetric analysis of the impact of political risks on CO2 emissions. The results show that the total effect of political risks on CO2 emissions is negative for the global panel. Although political risks increase countries’ CO2 emissions by promoting secondary industry (structure effect) for the global panel, the scale and technique effects of political risks can alleviate the greenhouse effect. Furthermore, the impacts of the influencing factors on countries’ CO2 emissions are significantly heterogeneous and asymmetric across different quantiles. Based on the above findings, this study provides several targeted policy suggestions for mitigating countries’ CO2 emissions.