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ORIGINAL RESEARCH
Driving the Green Shift: How Energy Transition
and Environmental Policy Stringency
Shape Environmental Quality
1
School of Economics and Management, Panzhihua University, Panzhihua, China
2
Department of Economics, Division of Management and Administrative Science,
University of Education Lahore, Pakistan
3
Faculty of Mathematical Economics, Thuongmai University, Hanoi, Viet Nam
4
Institute of Business Administration Thuongmai University, Hanoi, Viet Nam
5
Faculty of International Business and Economics, Thuongmai University, 79 Ho Tung Mau, Hanoi, Vietnam
Submission date: 2024-10-09
Final revision date: 2024-12-19
Acceptance date: 2025-01-17
Online publication date: 2025-03-18
Corresponding author
KEYWORDS
TOPICS
ABSTRACT
Climate change and environmental degradation pose serious threats to socio-economic
and ecological development. Global economies enforce strict environmental regulations and renewable
energy transition policies to address climate vulnerability. Therefore, this study aimed to explore
the moderating role of environmental policy stringency (EPS) on the relationship between energy
transition (ET) and carbon dioxide (CO2) emissions from energy. The present study also aims to
examine the effects of energy transition and environmental stringency policies on CO2 emissions from
energy. For this purpose, this study utilized a cross-sectional autoregressive distributional lag approach
on panel data (1995-2020) from 38 world economies. Moreover, two econometric techniques, augmented
mean group (AMG) and common correlated effects mean group (CCEMG), were used for the robustness
checks. The findings revealed that ET and EPS have significant and negative individual impacts on CO2
emissions. Similarly, EPS also plays a strong moderating role in the relationship between ET and CO2
emission. This implies that EPS can boost ET, which plays a crucial role in lowering CO2 emissions
and improving environmental quality. Policymakers should support investment in renewable energy
transitions, offer fiscal incentives to the sector, and nurture competitive market structures that provide
policy direction and expectations for the renewed energy business.
CONFLICT OF INTEREST
The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
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