Does environmental policy stringency influence CO2 emissions in the Asia Pacific region? A nonlinear perspective

Environmental policy stringency (EPS) is widely adopted as the most practical option to tackle the menace of environmental degradation. Therefore, this study investigates the dynamic linkage between EPS and carbon dioxide (CO₂) emissions in the most polluted countries of the Asia Pacific Region for the period 1991–2021. For empirical analysis, we have relied on nonlinear panel ARDL methods. In the NARDL analysis, a positive shock in EPS has a significant negative effect on CO₂, while a negative shock in EPS has a significant positive impact on CO₂ in both the short and long run. Moreover, the growth of human capital and the rise in renewable energy consumption are crucial in improving environmental quality; however, the rise in the region’s economic prosperity makes the region more polluted in the long run. In light of these findings, our study emphasizes the critical role of policymakers in the Asia Pacific region in implementing and maintaining strict environmental policies to effectively control carbon emissions. These policies can complement other mitigation strategies, such as raising environmental awareness and promoting renewable energy consumption.