Do Environmental Stringency Policies and Human Development Reduce CO2 Emissions? Evidence from G7 and BRICS Economies

This study explores the impact of environmental policies and human development on the CO2 emissions for the period of 1995–2015 in the Group of Seven and BRICS economies in the long run through panel cointegration and causality tests. The causality analysis revealed a bilateral causality between environmental stringency policies and CO2 emissions for Germany, Japan, the United Kingdom, and the United States of America, and a unilateral causality from CO2 emissions to the environmental stringency policies for Canada, China, and France. On the other hand, the analysis showed a bilateral causality between human development and CO2 emissions for Germany, Japan, the United Kingdom, and the United States of America, and unilateral causality from CO2 emissions to human development in Brazil, Canada, China, and France. Furthermore, the cointegration analysis indicated that both environmental stringency policies and human development had a decreasing impact on the CO2 emissions.