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Linking governance with environmental quality: a global perspective.

Mohammad Naim Azimi1, Mohammad Mafizur Rahman2, Son Nghiem3

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Area of Science:

  • Environmental Science
  • Economics
  • Political Science

Background:

  • Global environmental quality is a significant concern requiring effective policy solutions.
  • Governance plays a critical role in addressing environmental challenges and promoting sustainability.

Purpose of the Study:

  • To examine the impact of governance on environmental quality, specifically CO2 emissions, across 180 countries.
  • To construct a Composite Governance Index (CGI) to quantify governance effects on CO2 emissions.
  • To analyze how governance impacts vary based on country income levels.

Main Methods:

  • Data analysis for 180 countries from 1999 to 2021.
  • Classification of countries into full and income-level panels for precise analysis.
  • Application of the cross-sectionally augmented autoregressive distributed lags model.

Main Results:

  • A confirmed long-run relationship exists between the Composite Governance Index (CGI), CO2 emissions, and control variables.
  • The CGI is vital for enhancing environmental quality by mitigating CO2 emissions across all country panels.
  • The magnitude of CGI's effect on CO2 emissions varies significantly with a country's income level.

Conclusions:

  • Effective governance is a key driver for reducing CO2 emissions and improving environmental quality.
  • Policy interventions must be tailored to national income levels due to varying governance impacts.
  • Factors like energy consumption, population growth, trade, and urbanization negatively affect environmental quality, while financial development and human development positively influence it.