The Drivers of Ecological Sustainability: Climate Policy, Institutions, and Renewable Energy

Abstract

Aim of the Study: This research examines the relationship between climate policy strength, institutional quality, renewable energy use, and ecological sustainability among a sample of (selected developed and developing) countries between 2007-2021.

Methodology: The analysis will use the fixed effects, random effects, and system GMM estimators to analyze the effect of structural, policy, and governance variables on environmental performance based on the Environmental Kuznets Curve and the institutional theory.

Findings: Descriptive statistics indicate that there is a high cross-country heterogeneity in the ecological pressure, innovation and policy performance. Empirical evidence continues to indicate that the use of renewable energy sources has a significant, negative impact on ecological footprint, thus highlighting its high importance in alleviating degradation. Climate policy performance similarly exhibits a strong negative association with ecological pressure, which indicates the need to have coherent and well-imposed policy frameworks. In the fixed effects model, the negative association between institutional quality and ecological footprint is also substantial, which proves that the presence of a better system of governance leads to better environmental performance. On the other hand, the impacts of economic growth, innovation and demographic pressures are complex and specific.

Conclusion: The results conclude that policy ambition, the effectiveness of governance, and the structural economic dynamics influence the environmental sustainability. Long-term ecological stability can be achieved through comprehensive policy interventions comprising of strict climate policy, sound institutional structures, and long-term renewable energy changeovers.