This book chapter explores the nexus between environmental policy stringency, economic complexity, and CO2 emissions across six economies, namely India, Brazil, Indonesia, China, South Africa, and South Korea from the period 2000–2020.
Authors
Nupur Nirola, Assistant Professor, Jindal School of International Affairs, O.P. Jindal Global University, Sonipat, Haryana, India.
Arth Agarwal, Reporter, Republic World.
Summary
The rise of the “Global South” over the last decade is the new dynamic phenomenon of the contemporary global order. The economies are utilizing fossil fuels more and more in their industrial processes, imposing a negative externality. Under these circumstances, stringent environmental policies have become much more necessary to foster public awareness of environmental impact and lower carbon emissions. In retrospect, the technology embedded in the production process affects the emissions from fossil fuels.
The production undergoes structural changes toward technological advancement and knowledge-based processes, through the diversification of exports, also known as economic complexity. This chapter investigates whether strict environmental regulations mitigate carbon emissions when an economy shifts to a more complex one. In other words, it explores the nexus between environmental policy stringency (EPS), economic complexity (EC), and carbon dioxide (CO2) emissions across six diverse “Global South” economies, namely India, Brazil, Indonesia, China, South Africa, and South Korea from the period 2000–2020 using advanced econometric techniques.
Key findings reveal that while stringent regulations initially correlate with heightened emissions, economic complexity in the production process attenuates this effect. Furthermore, employing the Method of Moment Quantile regression as robustness unveils intricate non-linear relationships illustrating that stringent regulations exhibit a mitigating effect on environmental degradation, particularly at greater economic complexity levels, highlighting their differing effects on various quantiles of environmental outcomes.
Published in: Polycrisis and Economic Development in the Global South, Routledge.
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