Exploring the influence of democracy, rule of law, and societal well-being on climate action in OECD nations

Abstract

Attaining the goals of the Paris Climate Agreement’s goals is daunting as global carbon dioxide (CO2) emissions persistently escalate. It is vital to comprehend the elements that contribute to CO2 emissions to devise strategies for their reduction. While there is wealth of research on the impact of macroeconomic factors and clean energy transition on CO2 emissions, the influence of democracy and societal well-being on environmental quality remains underexplored. This study, therefore, investigates the role of democracy and happiness in the shift towards sustainable energy. It uses data from 36 OECD countries spanning from 2005 to 2021 and employs a panel quantile regression model. The study considers economic growth, population size, technological innovation, and the effects of renewable energy use on clean energy as control variables. The results indicate that democracy or the rule of law contributes to a decrease in CO2 emissions, suggesting that democratic principles may influence the adoption of emissions-reducing technologies in OECD countries. Interestingly, the study reveals a negative correlation between CO2 emissions and happiness, implying that a reduction in CO2 emissions could lead to increased happiness. This is because happier individuals in OECD countries appear to be more effective in maintaining a clean environment compared to their less happy counterparts.