Environmental impact of fiscal decentralization, green technology innovation and institution's efficiency in developed countries using advance panel modelling

The debate regarding mitigation of carbon dioxide emissions and fiscal decentralization has gained extreme attention, but only a little evidence supports this issue. Therefore, this study adopts fiscal decentralization, green technology innovation, and institutional efficiency that reduce environmental degradation and help to create a sustainable environment in seventeen developed countries. This study applies a novel Methods of Moment's Quantiles Regression (MMQR) which helps to deal with asymmetricity, structural change and non-normality. The overall results exhibit emissions mitigating effect of fiscal decentralization, green technology innovation and institutional efficiency. However, the emissions mitigating effects of fiscal decentralization is the lowest for lower quantiles and the highest for higher emissions quantiles. In contrast, emission reduction effect of green technology innovation and institutional efficiency is higher for lowest quantiles and lower for highest quantiles. These results confirm the asymmetric effect of fiscal decentralization, green technology innovation, and institutional efficiency on carbon emissions, and validating that their effect is not alike across all distribution, rather significantly varied at lower, medium, and higher quantiles. These results offer valuable suggestions to improve the environmental sustainability.

Automated summary

This study examines the effects of fiscal decentralization, green technology innovation, and institutional efficiency on carbon emissions. The results show that these factors have mitigating effects on emissions, but their effects vary across different emission quantiles.