The effects of spatial spillover of good governance and renewable energy on CO2 emissions

This study examines the relationship between renewable energy, good governance, and CO2 emissions using the Dynamic Spatial Durbin Model on data from 179 countries between 2002 and 2015. The study confirms the environmental Kuznets hypothesis and finds that while good governance has negative direct and long run effects on CO2 emissions, its spillover effects on neighboring countries are significantly positive. This supports the pollution haven hypothesis, suggesting that improving governance in a country reduces domestic CO2 emissions while increasing emissions in neighboring countries. The study emphasizes the need for a global approach to improving governance. The long run effects of renewable energy on CO2 emissions are negative, indicating that the use of renewable energy in a country reduces CO2 emissions in neighboring countries due to imitation and learning. These findings reveal the complex interplay between good governance and CO2 emissions and highlight the importance of considering spillover effe cts in environmental policy decision-making. Graphical Abstract