Determinants of CO2 emissions in European Union countries

• Autor(a) principal: Patrício, Margarida da Silva
• Data de Publicação: 2020
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.6/10868
• topic: Ardl; Emissões de Co2; Energia Renovável; Hipótese Pollution Halo; Investimento Direto Estrangeiro; Regulação Ambiental; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

The economic growth is one of the main drivers of pollution. Climate change caused by the increase in emissions has harmful and irreversible effects on economies as a whole. Currently, climate change represents a challenging issue for policymakers. This research intends to contribute to the current debate on the factors that contribute to reducing emissions, supplying empirical evidence of the role of environmental regulation in this process. In detail, this research aims to bridge a gap in the literature by giving special attention to the effects of market-based regulation, regulatory incentive policies for renewables deployment, and foreign direct investment on carbon dioxide emissions. To accomplish this objective, it uses yearly data from 1995 to 2017 for 17 European Union (EU) countries. To control for some possible endogeneity, and to study the short- and the longrun effects individually, an Autoregressive Distributed Lag (ARDL) model was used with a Driscoll-Kraay estimator. The main findings show that environmental regulation is effective in cutting CO2 emissions in the long-run. Additionally, the policies supporting renewable energy sources negatively affect CO2 emissions in both the short- and long-run. The effectiveness of these policies is further demonstrated, with foreign direct investment reducing carbon dioxide emissions, suggesting that the EU is managing to attract high quality and innovative investment. The pollution halo hypothesis was validated for EU countries.