Carbon dioxide emissions and governance: A nonparametric analysis for the G-20

This paper applies nonparametric estimators to examine countries’ carbon dioxide (CO2) emissions and governance relationship. By using data for the time period 1996-2010 of the twenty largest economies (Group of twenty, G-20) the dynamics of the considered relationship are analyzed. Six governance measures are included in our analysis (Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption) as have been defined in World Governance Indicators from the World Bank. The empirical findings reveal a nonmonotonic relationship between countries’ CO2 emissions and the examined governance measures. In addition and with respect to the environmental policy makers, a significant difference on the number of governance measures influencing countries’ carbon dioxide emissions which is subject to countries’ specific regional and development variations is recorded. Finally, the carbon dioxide emissions-governance relationship is highly nonlinear and appears that countries’ higher governance quality does not always result to lower carbon dioxide emission levels.