The Role of Quality of Governance in Reducing Pollution in Romania: An ARDL and Nonparametric Bayesian Approach

Abstract

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Achieving global sustainability and greener growth goals poses a challenge for all countries, especially the developing ones. The quality of institutional framework of a country and its effectiveness determines the level of environmental control and sustainability. Since pollution reduction is an objective for European environmental policies, Romania should achieve this goal taking into account the quality of governance. In this study, the impact of Worldwide Governance Indicators on greenhouse gas emissions is assessed for Romania during 1996–2019 using autoregressive distributed lag models. The results indicate that control of corruption, political stability, and regulatory quality reduced pollution in the long-run, while voice and accountability contributed to the growth of greenhouse gas emissions. Renewable energy consumption did not reduce pollution in the short- and long-run during 1996–2019, while the analysis made for 2007–2019 suggested the significant contribution of renewable energy consumption in reducing pollution. The analysis based on Bayesian ridge regressions after Romania joined the European Union indicated that control of corruption and political stability reduced the level of pollution. Policy implications of these results are widely discussed.

Keywords

• GHG emissions
• pollution
• ARDL model
• governance
• corruption