Impact of Environmental Policy Stringency on Consumption-Based CO2: Role of Economic Policy Uncertainty in Top 11 GDP-Ranked Countries for EKC Hypothesis

Jun Pan, Yanwu Chen and Heng Luo

SAGE Open, 2025, vol. 15, issue 3, 21582440251361637

Abstract: Environmental issues are becoming increasingly severe, increasing the urgency to address ecological and environmental pressures. This study explores the relationship between environmental policy stringency and environmental degradation using data from the 11 largest economies by GDP from 1992 to 2020. Additionally, it examines the existence of the Environmental Kuznets Curve (EKC) and the moderating role of economic policy uncertainty. First, the regression results show that environmental policy stringency helps reduce emissions. Second, both inverted U-shaped and N-shaped EKC patterns are observed. These findings remain robust after testing. Third, asymmetric analysis reveals that environmental policies are less effective in countries facing greater environmental pressures. Finally, economic policy uncertainty amplifies the reduction effect of environmental policy stringency. These findings provide practical implications for improving environmental quality while also broadening the theoretical scope of the EKC.

Keywords: environmental policy stringency; consumption-based CO2-emissions; asymmetric analysis; economic policy uncertainty; EKC (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:15:y:2025:i:3:p:21582440251361637

DOI: 10.1177/21582440251361637

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