Is Climate Policy Effectiveness Important for Country’s Competitiveness Among EU Member States?

Abstract

This study examines the level of relationships between the competitiveness position of the EU countries and the climate and sustainable finance policy effectiveness. In this research we utilized panel data analysis, where the level and direction of connectedness between World Competitiveness Index (WCI) and climate policy effectiveness and green finance regulatory frameworks were empirically analyzed. It was found that the level of relationships between a country’s competitiveness index and level of climate policy regulations is positive and significant among the EU member states. Moreover, we are among the first who analyze the relationship between the level of a country’s competitiveness and green finance regulatory framework which represents the cornerstone for the implementation of the EU sustainability strategy. The paper and the empirical results provide solid grounds for the policymakers to continue developing the climate and sustainable finance regulatory ecosystem needed to achieve the Eurozone climate targets by 2030 and become fully climate neutral by 2050.

Keywords

• sustainability
• competitiveness
• climate policies
• green finance regulatory frameworks