Impact of Economic Policy Uncertainty on Carbon Emissions: Evidence from 137 Multinational Countries

With growing economic policy uncertainty (EPU) and the importance of protecting the natural environment worldwide, the relationship between EPU and carbon emissions should be investigated further. However, conclusions in the existing literature on the relationship between EPU and carbon emission are inconclusive. This paper aims to examine the influence of EPU on carbon emissions according to the Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) model. To investigate such essential issues, we conduct GMM estimations by utilizing cross-country data covering 137 countries during the period 1970–2018, obtained from World Bank and OECD statistics. Our empirical estimations support that EPU would bring about more carbon emissions, while we conduct empirical analysis by changing the system of measurement, employing alternative estimation and constructing new samples. Our study provides substantial policy implications for government participation in international treaties on environmental protection to mitigate environmental degradation.