Role of circular economy, energy transition, environmental policy stringency, and supply chain pressure on CO2 emissions in emerging economies

Abstract

This paper investigates the effect of the circular economy on CO2 emissions growth by considering the role of energy transition, climate policy stringency, industrialization, and supply chain pressure from 1997 to 2020 using panel quantile Autoregressive Distributed Lags (QARDL) and the panel PMG. We employ cointegration association in the long run among the variables, and the results of the two models confirm this. Findings reveal that circular economy and climate policy stringency significantly negatively impact carbon emissions. On the other hand, the energy transition, industrialization, and supply chain pressures are crucial to determining CO2 emissions in the short and long run. The finding further explores that municipal waste generation recycling is considerable at the mean and upper 90th quantiles than the lower quantile. Therefore, the empirical results of the current study provide acumens for policymakers of advanced economies and emerging markets to maintain the balance among circular economy, energy transition, environmental policy stringency, and supply chain pressure for reducing CO2 emissions without halting economic growth and sustainable development. Furthermore, practical implications are reported through the lens of carbon neutrality and structural changes.