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

Ying Chen, Xiaoqian Shen and Li Wang
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Ying Chen: School of Economics, Fudan University, Shanghai 200433, China
Xiaoqian Shen: School of Economics, Fudan University, Shanghai 200433, China
Li Wang: School of Economics, Fudan University, Shanghai 200433, China

Sustainability, 2021, vol. 13, issue 8, 1-13

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 CO 2 emissions, economic policy uncertainty has become one of the most important factors affecting CO 2 emissions. COVID-19 has demonstrated that economic policy uncertainty reduces the enthusiasm of market participants, which, in turn, reduces energy demand and CO 2 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 CO 2 emissions. That is, the higher the uncertainty of economic policy, the lower the per capita CO 2 emissions of countries. What’s more, this negative effect is larger in emerging market countries than in advanced countries.

Keywords: economic policy uncertainty; air pollution; investment effect; consumption effect (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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