IDEAS home Printed from https://ideas.repec.org/p/drm/wpaper/2023-25.html
   My bibliography  Save this paper

Unpacking the green box: Determinants of Environmental Policy Stringency in European countries

Author

Listed:
  • Francisco Serranito
  • Donatella Gatti
  • Gaye-Del Lo

Abstract

This paper identifies the determinants of OECD Environmental Policy Stringency (EPS) index using a panel of 21 European countries for the period 2009-2019. If there is a large literature on the macroeconomic, political, and social determinants of EPS, the people’s attitudes or preferences toward environmental policies is still burgeoning. Thus, the main goal of this paper is to estimate the effects of people’s awareness regarding environmental issues on the EPS indicator. Due to the endogeneity of preferences, we have applied an instrumental variable framework to estimate ourempirical model. Our most important result is to show that individual environmental preferences have a positive and significant effect on the level of EPS indicator : on average, a rise in individual preferences of 10% in a country will increase its EPS indicator by 2.30%. Our results have important policy implications.

Suggested Citation

  • Francisco Serranito & Donatella Gatti & Gaye-Del Lo, 2023. "Unpacking the green box: Determinants of Environmental Policy Stringency in European countries," EconomiX Working Papers 2023-25, University of Paris Nanterre, EconomiX.
    • Handle: RePEc:drm:wpaper:2023-25
    as

    Download full text from publisher

    File URL: https://economix.fr/pdf/dt/2023/WP_EcoX_2023-25.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Martínez-Zarzoso, Inma & Phillips, Jennifer, 2020. "Freedom of the press, inequality and environmental policy," Environment and Development Economics, Cambridge University Press, vol. 25(6), pages 537-560, December.
    2. Wan, Guanghua & Wang, Chen & Wang, Jinxian & Zhang, Xun, 2022. "The income inequality-CO2 emissions nexus: Transmission mechanisms," Ecological Economics, Elsevier, vol. 195(C).
    3. Douenne, Thomas & Fabre, Adrien, 2020. "French attitudes on climate change, carbon taxation and other climate policies," Ecological Economics, Elsevier, vol. 169(C).
    4. Feng, Guohua & McLaren, Keith R. & Yang, Ou & Zhang, Xiaohui & Zhao, Xueyan, 2021. "The impact of environmental policy stringency on industrial productivity growth: A semi-parametric study of OECD countries," Energy Economics, Elsevier, vol. 100(C).
    5. Dang, Hai-Anh H. & Serajuddin, Umar, 2020. "Tracking the sustainable development goals: Emerging measurement challenges and further reflections," World Development, Elsevier, vol. 127(C).
    6. Baiardi, Donatella & Morana, Claudio, 2021. "Climate change awareness: Empirical evidence for the European Union," Energy Economics, Elsevier, vol. 96(C).
    7. Dechezleprêtre, Antoine & Fabre, Adrien & Kruse, Tobias & Planterose, Bluebery & Chico, Ana Sanchez & Stantcheva, Stefanie, 2022. "Fighting Climate Change: International Attitudes Toward Climate Policies," CEPR Discussion Papers 17602, C.E.P.R. Discussion Papers.
    8. Daron Acemoglu & Ufuk Akcigit & Douglas Hanley & William Kerr, 2016. "Transition to Clean Technology," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 52-104.
    9. Cherry, Todd L. & Kallbekken, Steffen & Kroll, Stephan, 2017. "Accepting market failure: Cultural worldviews and the opposition to corrective environmental policies," Journal of Environmental Economics and Management, Elsevier, vol. 85(C), pages 193-204.
    10. Enrico Maria de Angelis & Marina Di Giacomo & Davide Vannoni, 2019. "Climate Change and Economic Growth: The Role of Environmental Policy Stringency," Sustainability, MDPI, vol. 11(8), pages 1-15, April.
    11. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    12. Gatti, Donatella, 2022. "Going green and (un)equal ? Political coalitions, redistribution, and the environment," Economic Modelling, Elsevier, vol. 116(C).
    13. Antonin Pottier & Emmanuel Combet & Jean-Michel Cayla & Simona de Lauretis & Franck Nadaud, 2020. "Qui émet du CO 2 ? Panorama critique des inégalités écologiques en France," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 73-132.
    14. Falco, Chiara & Corbi, Raphael, 2023. "Natural disasters and preferences for the environment: Evidence from the impressionable years," Economics Letters, Elsevier, vol. 222(C).
    15. Mattauch, Linus & Hepburn, Cameron & Spuler, Fiona & Stern, Nicholas, 2022. "The economics of climate change with endogenous preferences," Resource and Energy Economics, Elsevier, vol. 69(C).
    16. Lesly Cassin & Paolo Melindi-Ghidi & Fabien Prieur, 2021. "The impact of income inequality on public environmental expenditure with green consumerism," Working Papers 2021.08, FAERE - French Association of Environmental and Resource Economists.
    17. Barbara Annicchiarico & Stefano Carattini & Carolyn Fischer & Garth Heutel, 2021. "Business Cycles and Environmental Policy: Literature Review and Policy Implications," NBER Working Papers 29032, National Bureau of Economic Research, Inc.
    18. Olle Folke, 2014. "Shades Of Brown And Green: Party Effects In Proportional Election Systems," Journal of the European Economic Association, European Economic Association, vol. 12(5), pages 1361-1395, October.
    19. Nusrate Aziz & Belayet Hossain & Laura Lamb, 2022. "Does green policy pay dividends?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(2), pages 147-172, April.
    20. Alessandro Marra & Emiliano Colantonio, 2022. "The institutional and socio-technical determinants of renewable energy production in the EU: implications for policy," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(2), pages 267-299, June.
    21. Timothy Besley & Torsten Persson, 2019. "JEEA-FBBVA LECTURE 2017: The Dynamics of Environmental Politics and Values," Journal of the European Economic Association, European Economic Association, vol. 17(4), pages 993-1024.
    22. Donatella Gatti, 2022. "What’s behind the Political Support for Green Welfare State Institutions?," Working Papers hal-03534136, HAL.
    23. Martínez-Zarzoso, Inmaculada & Bengochea-Morancho, Aurelia & Morales-Lage, Rafael, 2019. "Does environmental policy stringency foster innovation and productivity in OECD countries?," Energy Policy, Elsevier, vol. 134(C).
    24. Rojas-Vallejos, Jorge & Lastuka, Amy, 2020. "The income inequality and carbon emissions trade-off revisited," Energy Policy, Elsevier, vol. 139(C).
    25. Chen, Xudong & Huang, Bihong & Lin, Chin-Te, 2019. "Environmental awareness and environmental Kuznets curve," Economic Modelling, Elsevier, vol. 77(C), pages 2-11.
    26. Stiglitz, Joseph E., 2019. "Addressing climate change through price and non-price interventions," European Economic Review, Elsevier, vol. 119(C), pages 594-612.
    27. Faraz Farhidi & Kaveh Madani & Rohan Crichton, 2022. "Have Extreme Events Awakened Us?," Sustainability, MDPI, vol. 14(12), pages 1-9, June.
    28. Gerber, Elisabeth R. & Jackson, John E., 1993. "Endogenous Preferences and the Study of Institutions," American Political Science Review, Cambridge University Press, vol. 87(3), pages 639-656, September.
    29. Donatella Gatti & Julien Vauday, 2023. "Environmental transition through social change and lobbying by citizens," CEPN Working Papers hal-04158754, HAL.
    30. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    31. Sara Maestre-Andrés & Stefan Drews & Jeroen van den Bergh, 2020. "Perceived fairness and public acceptability of carbon pricing: a review of the literature," Climate Policy, Taylor & Francis Journals, vol. 19(9), pages 1186-1204, July.
    32. Tobias Kruse & Antoine Dechezleprêtre & Rudy Saffar & Leo Robert, 2022. "Measuring environmental policy stringency in OECD countries: An update of the OECD composite EPS indicator," OECD Economics Department Working Papers 1703, OECD Publishing.
    33. Chiara Falco & Raphael Corbi, 2022. "Natural Disasters and Preferences for the Environment: Evidence from the Impressionable Years," Department of Economics 0207, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    34. Haiqing Hu & Di Chen & Chun‐Ping Chang & Yin Chu, 2021. "The Political Economy Of Environmental Consequences: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 35(1), pages 250-306, February.
    35. Ziegler, Andreas, 2017. "Political orientation, environmental values, and climate change beliefs and attitudes: An empirical cross country analysis," Energy Economics, Elsevier, vol. 63(C), pages 144-153.
    36. Martin Fritz & Max Koch, 2019. "Public Support for Sustainable Welfare Compared: Links between Attitudes towards Climate and Welfare Policies," Sustainability, MDPI, vol. 11(15), pages 1-15, August.
    37. Mahmoud Hassan & Damien Rousselière, 2022. "Does increasing environmental policy stringency lead to accelerated environmental innovation? A research note," Applied Economics, Taylor & Francis Journals, vol. 54(17), pages 1989-1998, April.
    38. Dong-Hyeon Kim & Shu-Chin Lin, 2022. "Trade Openness and Environmental Policy Stringency: Quantile Evidence," Sustainability, MDPI, vol. 14(6), pages 1-15, March.
    39. Dincer, Oguzhan C. & Fredriksson, Per G., 2018. "Corruption and environmental regulatory policy in the United States: Does trust matter?," Resource and Energy Economics, Elsevier, vol. 54(C), pages 212-225.
    40. Stefan Drews & Jeroen C.J.M. van den Bergh, 2016. "What explains public support for climate policies? A review of empirical and experimental studies," Climate Policy, Taylor & Francis Journals, vol. 16(7), pages 855-876, October.
    41. Matthew R. Sloggy & Jordan F. Suter & Mani Rouhi Rad & Dale T. Manning & Chris Goemans, 2021. "Changing opinions on a changing climate: the effects of natural disasters on public perceptions of climate change," Climatic Change, Springer, vol. 168(3), pages 1-26, October.
    42. Constant, Karine & Davin, Marion, 2019. "Environmental Policy And Growth When Environmental Awareness Is Endogenous," Macroeconomic Dynamics, Cambridge University Press, vol. 23(3), pages 1102-1136, April.
    43. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
    44. Albrizio, Silvia & Kozluk, Tomasz & Zipperer, Vera, 2017. "Environmental policies and productivity growth: Evidence across industries and firms," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 209-226.
    45. Lopez, Ramon & Mitra, Siddhartha, 2000. "Corruption, Pollution, and the Kuznets Environment Curve," Journal of Environmental Economics and Management, Elsevier, vol. 40(2), pages 137-150, September.
    46. Arminen, Heli & Menegaki, Angeliki N., 2019. "Corruption, climate and the energy-environment-growth nexus," Energy Economics, Elsevier, vol. 80(C), pages 621-634.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Donatella Gatti & Julien Vauday, 2023. "Environmental transition through social change and lobbying by citizens," Working Papers hal-04158754, HAL.
    2. Donatella Gatti & Julien Vauday, 2023. "Green cultural transition, environmental taxes, and collective lobbying by social groups of citizens," Post-Print hal-04189019, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gatti, Donatella, 2022. "Going green and (un)equal ? Political coalitions, redistribution, and the environment," Economic Modelling, Elsevier, vol. 116(C).
    2. Sterner, Thomas & Ewald, Jens & Sterner, Erik, 2024. "Economists and the climate," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 109(C).
    3. Douenne, Thomas & Fabre, Adrien, 2020. "French attitudes on climate change, carbon taxation and other climate policies," Ecological Economics, Elsevier, vol. 169(C).
    4. Mireille Chiroleu-Assouline, 2022. "Rendre acceptable la nécessaire taxation du carbone. Quelles pistes pour la France ?," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 15-53.
    5. Ravigné, Emilien & Ghersi, Frédéric & Nadaud, Franck, 2022. "Is a fair energy transition possible? Evidence from the French low-carbon strategy," Ecological Economics, Elsevier, vol. 196(C).
    6. Vona, Francesco, 2023. "Managing the distributional effects of climate policies: A narrow path to a just transition," Ecological Economics, Elsevier, vol. 205(C).
    7. Lipari, Francesca & Lázaro-Touza, Lara & Escribano, Gonzalo & Sánchez, Ángel & Antonioni, Alberto, 2024. "When the design of climate policy meets public acceptance: An adaptive multiplex network model," Ecological Economics, Elsevier, vol. 217(C).
    8. Román-Aso, Juan A. & Bellido, Héctor & Olmos, Lorena, 2024. "Does corruption pollute the wheel? An analysis for OECD countries," Ecological Economics, Elsevier, vol. 223(C).
    9. Mehmet Demiral & Emrah Eray Akça & Ipek Tekin, 2021. "Predictors of global carbon dioxide emissions: Do stringent environmental policies matter?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(12), pages 18337-18361, December.
    10. Daniele Malerba, 2022. "The Effects of Social Protection and Social Cohesion on the Acceptability of Climate Change Mitigation Policies: What Do We (Not) Know in the Context of Low- and Middle-Income Countries?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(3), pages 1358-1382, June.
    11. Mireille Chiroleu-Assouline & Mouez Fodha, 2023. "Debt, tax and environmental policy [Dette, taxe et politique environnementale]," Post-Print halshs-04181981, HAL.
    12. Agneman, Gustav & Henriks, Sofia & Bäck, Hanna & Renström, Emma, 2024. "On the nexus between material and ideological determinants of climate policy support," Ecological Economics, Elsevier, vol. 219(C).
    13. Kanberger, Elke D. & Ziegler, Andreas, 2023. "On the preferences for an environmentally friendly and fair energy transition: A stated choice experiment for Germany," Energy Policy, Elsevier, vol. 182(C).
    14. Arndt, Christoph, 2023. "Climate change vs energy security? The conditional support for energy sources among Western Europeans," Energy Policy, Elsevier, vol. 174(C).
    15. Bolognesi, Thomas & Pflieger, Géraldine, 2024. "Do you perceive interdependencies among human activities related to water? Drivers and effects on preferences for participation and regulation," Ecological Economics, Elsevier, vol. 223(C).
    16. Marion Dupoux & Benjamin Ouvrard, 2023. "Harnessing social information to improve public support for Pigouvian taxes," Working Papers 2024-05, Grenoble Applied Economics Laboratory (GAEL).
    17. Guoyao Yan & Yu Hao & Yunxia Guo & Haitao Wu, 2022. "Are environmental problems a barometer of corruption in the eyes of residents? Evidence from China," Kyklos, Wiley Blackwell, vol. 75(2), pages 337-361, May.
    18. Benatti, Nicola & Groiss, Martin & Kelly, Petra & Lopez-Garcia, Paloma, 2024. "The impact of environmental regulation on clean innovation: are there crowding out effects?," Working Paper Series 2946, European Central Bank.
    19. Vu, Trung V., 2020. "Individualism and climate change policies: International evidence," MPRA Paper 98888, University Library of Munich, Germany.
    20. Ewald, Jens & Sterner, Thomas & Sterner, Erik, 2022. "Understanding the resistance to carbon taxes: Drivers and barriers among the general public and fuel-tax protesters," Resource and Energy Economics, Elsevier, vol. 70(C).

    More about this item

    Keywords

    Environmental policy stringency; Environmental attitudes/concerns; inequality; environmental Kuznets curve; EU;
    All these keywords.

    JEL classification:

    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:drm:wpaper:2023-25. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Valerie Mignon (email available below). General contact details of provider: https://edirc.repec.org/data/modemfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.