How environmental policy stringency, green investment, and renewable energy contribute to environmental pollution and load capacity factor in G11 countries?

Tehreem Fatima, Asif Razzaq, Xuan‐Hoa Nghiem and Muhammad Saeed Meo

Natural Resources Forum, 2025, vol. 49, issue 4, 3967-3983

Abstract: Amid growing concerns about global environmental sustainability, the focus on understanding the interplay between environmental policies, investments in sustainable practices, and renewable energy sources has intensified. This study delves into the relationship between environmental policy stringency, green investment, and the utilization of renewable energy, specifically examining their impact on the load capacity factor (LCF) within G11 countries utilized from 2000 to 2021. Manifestly, LCF integrates both demand‐ and supply‐side aspects of environmental quality. It also utilizes a comprehensive indicator of environmental policy stringency, evaluating its impact alongside green investment. Employing the Cross Sectional‐Augmented Autoregressive Distributed Lag (CS‐ARDL) model and the Common Correlated Effect Mean Group (CCEMG) approach, this research demonstrates that environmental policy stringency, green investment, and renewable energy consumption positively and significantly influence the LCF, consequently fostering improvements in environmental sustainability in both short‐ and long‐term scenarios. It is worth mentioning that environmental policy stringency has the strongest effects on LCF followed by renewable energy. The findings strongly indicate that reinforcing environmental policies, promoting green investment, and embracing renewable energy usage can collectively yield a substantial reduction in environmental pressure for G11 countries.

Date: 2025
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https://doi.org/10.1111/1477-8947.12573

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Persistent link: https://EconPapers.repec.org/RePEc:wly:natres:v:49:y:2025:i:4:p:3967-3983

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