Government Effectiveness and Carbon Dioxide Emission
Description
Abstract: This paper evaluates the relationship between government effectiveness and carbon emissions by analyzing data for 187 countries for the 1996 to 2014 timeframe. We found a significant impact from government effectiveness on carbon emission reduction. Democracy, the stage of economic development and whether the country had endorsed the Kyoto protocol were also considered. We found that, first, democracy was conducive to reducing carbon emissions, however the effect of democracy diminished when heterogeneity of countries was incorporated. Second, high-income countries, particularly those with good government effectiveness, have higher carbon emissions. Finally, endorsement of the Kyoto Protocol diminished carbon emissions, which is manifested further through high government effectiveness. However, this effect was marginally decreasing for countries that committed to Kyoto protocol; and for other countries impacts reflected an inverted “U” shape. Furthermore, being an Annex B country in Doha amendment contributed to higher carbon emissions. Data Description: The data used in this paper is derived from the World Bank and the Quality of Governance Institute (QoG) and comprises panel data for 187 countries from 1996 to 2014. The dependent variable is a carbon emissions measure (kg per 2010 US$ of GDP), and the independent variable is government effectiveness. Many control variables were also selected to control for heterogeneity across countries, based on the scholarly literature. Specifically, GDP per capita, industry value added and GDP growth rates were included to control for the stage of economic development, economic growth and level of industrialization, all of which had been found to have significant influences on carbon emissions (Bo, 2011; Grossman & Krueger, 1995; Uçak et al., 2015). Urban population as a percentage of total population, forest area and agricultural land areas as percentages of total land area are also included to control for the effect of urbanization, which according to studies such as Fragkias et al. (2013); Lee et al. (2014); Wang et al. (2015), has been found to have significant effects on carbon reduction. We also considered the economic freedom index, following studies such as Bae et al. (2017); Bocken et al. (2011); and Joshi and Beck (2018). Measures of energy structure such as electricity production from oil, gas and coal sources (% of total)” and renewable energy consumption (% of total final energy consumption) were also included to reflect their importance in curbing carbon emissions, as suggested by Shafiei and Salim (2014). Contact Email: vsficy@foxmail.com