Economic Policy Uncertainty And Carbon Footprint: International Evidence

Abstract

Economic policy uncertainty is an evolving area of research that may affect environmental issues such as the carbon footprint. However, from a global perspective, it is not known whether economic policy uncertainty is significantly related to it. Motivated by this gap in the literature, we investigate the impact of economic policy uncertainty on carbon footprint. Using a sample of 2782 firms from 60 countries, our cross-sectional regression analysis finds that economic policy uncertainty is positively associated with the carbon footprint. This applies to the total, direct, and indirect carbon emissions measurements. However, we find that countries with better institutional governance alleviate the significant association between economic policy uncertainty and carbon footprint.