Achieving environmental quality through stringent environmental policies: Comparative evidence from G7 countries by multiple environmental indicators

Abstract

Compatible with the increasing public interest on climate change, countries have taken measures to combat climate change and support environmental sustainability. Considering this fact, this study investigates whether environmental measures, proxied by the environmental policy stringency (EPS) index, are efficient in achieving sustainability of environment in G7 countries as the leading economies; uses multiple environmental sustainability indicators, and applies quantile methods from 1991/Q1 to through 2020/Q4. The results show that (i) EPS curbs carbon dioxide emissions in France and the United States across all quantiles. Also, it has a declining effect in Germany and Italy at lower quantiles and in Canada at lower and higher quantiles; (ii) EPS declines ecological footprint in United States across all quantiles, while it curbs in Canada and Germany at lower quantiles as well as in Italy and United Kingdom at higher quantiles; (iii) EPS stimulates load capacity factor in France, United Kingdom, and United States across all quantiles and in Canada at higher quantiles; (iv) causal effect of EPS on the environment varies throughout quantiles; (v) the robustness of the results by quantile regression method is verified. Overall, the results reveal that the effect of EPS on environmental sustainability differentiates across environmental indicators, countries, and quantiles. In ensuring environmental quality, EPS is completely helpful in the United States, fully inefficient in Japan, and has a mixed effect in remaining G7 countries.