The role of economic freedom and clean energy in environmental sustainability: implication for the G-20 economies

Abstract

With the increasing challenge of attaining sustainable balance in socioeconomic-ecosystem activities, the aspects of the global goals are continously being harnesed in order to ensure a sustainable interaction. As an alliance of the United Nations, the G-20 member countries have not only committed to attaining the Sustainable Development Goals 2030, the alliance body has further fostered frameworks that are targeted at advancing global economic and environmental sustainability. Within this context, the current study examined the environmental sustainability effects arising from the economic freedom prowess in the panel of the G-20 economies over the period 2000–2016. Among the sparse studies, the study employed the indices of economic freedom: freedom to trade internationally, regulation, sound money, legal framework, and property right and alongside the real income and renewable energy consumption as explanatory indicators. With the result of the difference- and two-step system GMM (generalized method of moments), the legal system and property right, sound money, freedom to international trade, and regulatory efficiency are detrimental to the panel countries’ environmental quality. Although this is likely to be untrue for countries that have advanced their climate actions and especially the Sustainable Development Goals (SDGs) 2030, it suggests a dearth in the SDGs achievement among the developing and emerging economies. Moreover, it probably shows the depth of traditional or business-as-usual practices (such as the lack of sustainable economic and environmental practices) and the socioeconomic system that are obtainable in most of the developing and emerging economies. Thus, the study put forward tangible policies that are essential for governance and toward attaining desirable country-specific SDGs.

Economic Freedom, Education and CO2 Emissions: A Causality Analysis for EU Member States

“…In the related empirical literature, Adesina and Mwamba [35] revealed a negative effect of the trade freedom index on CO 2 emissions in 24 African economies. Alola et al [40] reached similar findings for G-20 countries. Therefore, our findings and the related empirical literature point out that international trade freedom is a significant determinant of CO 2 emissions for developing and developed countries.…”

“…The limited empirical literature on the nexus between economic freedom and the environment has generally utilized the regression approach and found mixed findings. Odugbesan et al [14], Cheon et al [34], Adesina and Mwamba [35], Bjørnskov [36], and Jain and Kaur [37] discovered a negative influence of economic freedom indicators on CO 2 emissions, but Wood and Herzog [38], Rapsikevicius et al [39], Chen [24], and Alola et al [40] have revealed mixed findings on the influence of economic freedom indicators on CO 2 emissions.…”

“…Chen [24] investigated the effect of government size in BRICS economies for the 1990-2018 period by means of the ARDL approach and discovered a positive effect of government size on CO 2 emissions in Brazil, China, India, and South Africa in short and long-term, but a negative long-term effect of government size on CO 2 emissions in Russia. Alola et al [40] also analyzed the effect of economic freedom indicators of law and order, freedom to trade internationally, regulation, and sound money on the ecological footprint in G-20 countries for the period of 2000-2016 through a dynamic regression approach and found that economic freedom indicators negatively influenced the environmental quality of the countries under consideration.…”

Does Green Financing Develop a Cleaner Environment for Environmental Sustainability: Empirical Insights From Association of Southeast Asian Nations Economies

“…Fossil fuels dominate energy investments. As a result, it is critical to move financial resources away from nonrenewable energy sources and toward sources that reduce carbon emissions ( Alola et al, 2022 ). Investments in green bonds offer a wide range of benefits in addition to their environmental benefits.…”

Assessing the impact of governance and health expenditures on carbon emissions in China: Role of environmental regulation

“…Since it first implemented its policy of reform and opening to the outside world in 1978, China, one of the largest developing countries, has gone through a period of rapid change. China's GDP grew at the rate of 9.7 percent per year over the course of the last 20 years, propelling the country into the top 10 list of the world's largest economies ( 8 ). However, this rapid expansion has resulted in the depletion of significant amounts of resources and an increase in the amount of pollution produced.…”