Do economic policy uncertainty and geopolitical risk surge CO emissions? New insights from panel quantile regression approach.

In recent times, economic policy uncertainty (EPU) and geopolitical risk (GPR) are increasing significantly where the economy and environment are affected by these factors. Therefore, the goal of this paper is to investigate whether EPU and GPR impede CO emissions in BRICST countries. We employ second-generation panel data methods, AMG and CCEMG estimator, and panel quantile regression model. The conclusions document that most of the variables are integrated at I (1), and there exists co-integration among considered variables of the study. Moreover, we note that EPU and GPR have a heterogeneous effect on CO emissions across different quantiles. EPU adversely affects CO emissions at lower and middle quantiles, while it surges the CO emissions at higher quantiles. On the contrary, geopolitical risk surges CO emissions at lower quartiles, and it plunges CO emissions at middle and higher quantiles. Furthermore, GDP per capita, renewable energy, non-renewable energy, and urbanization also have a heterogeneous impact on CO emissions in the conditional distribution of CO emissions. Based on the results, we discuss the policy direction.