Assessing the effects of green technology and green policies on climate neutrality progress : the role of institutional quality
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Date
2025-09-08
Authors
Στρατούλιας, Γεώργιος
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Abstract
In this dissertation, we examine the effects of green technology, green policy, and institutional quality factors on the European Union’s progress towards climate neutrality. We develop a theoretical framework that attributes climate neutrality progress to past performance, technological, policy, and institutional characteristics that are captured using a set of corruption, governance and legal system indicators. The energy-related productionbased CO2 productivity index is used as a proxy for a country’s progress towards climate neutrality since it captures a country’s ability to decouple CO2 emissions from growth. We employ the Generalized Method of Moments (GMM) in order to eliminate possible endogeneity issues derived from the inclusion of the lagged dependent variable in our model. Our empirical findings suggest a strong positive effect of green technology on CO2 productivity with renewable energy consumption and energy productivity having the most consistent effects. A positive effect of the lagged dependent variable indicates a divergence in performances among the EU-27 member states with countries that lag behind, failing to catch up. No effect is observed for the green policy variable, while mixed results, based on the GMM methodology, are noted for the institutional quality variables. Our results suggest the need for a change in the energy mix as well as an increase in the use of clean technologies, with a strong focus on countries that are low performers.
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Keywords
Climate neutrality, Green technology, Environmental taxation, Institutional quality, Corruption