Toward Sustainable Climate Governance: How Economic, Technological, and Geopolitical Factors Shape Environmental Policy Stringency

Abstract

This paper examines the effect of environmental pressure, geopolitical risk, technological innovation, economic growth, and urbanization on Environmental Policy Stringency (EPS) of E7 economies for the period 1992–2024. The main estimator is MMQR, and the other estimators are AMG, CCEMG, and median IVQR. The MMQR results demonstrate that technical innovation is positively and strongly related to EPS in all the quantiles considered, with larger coefficients in the higher quantiles. We find positive and significant relationships between economic growth and urbanization at upper quantiles, and modest negative associations between carbon emissions and higher quantiles. Geopolitical risk has mostly insignificant relationships. AMG and CCEMG studies provide complementary data on technological innovation and carbon emissions, whereas the IVQR results further strengthen the positive innovation‐EPS association. The current study adds to the existing body of evidence by investigating EPS as an effect of economic, technological, environmental, and geopolitical factors in rising economies via a distributional framework. The results of the study show the significance of technology capacity and regulatory circumstances adapted to the context for environmental governance, providing insights pertinent to SDG 9, SDG 11, and SDG 13.