Role of political risk to achieve carbon neutrality: Evidence from Brazil

The current research assesses the impact of political risk on carbon dioxide (CO2) emissions in Brazil while controlling the role of financial development, GDP growth, trade openness, and technological innovation. In doing so, the quarterly dataset from 1990 to 2018 is utilized with Bayer and Hanck cointegration, dynamic ordinary least square (DOLS) and canonical correlation regression (CCR), and frequency-domain causality tests. The cointegration test revealed a long-run association amongst the variables of interest. Furthermore, the outcomes from the DOLS and CCR revealed that increasing financial development, technological innovation, trade openness, and real growth increase CO2 emissions while a better political environment reduces environmental pollution.

Automated summary

The study assesses the impact of political risk on carbon dioxide (CO2) emissions in Brazil, finding that increasing financial development, technological innovation, trade openness, and real growth lead to higher CO2 emissions, while a better political environment reduces environmental pollution.