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The Ripple and Spillover Effects of Environmental Policy Stringency on Environmental Degradation in EU–14 Countries
Abstract
This study examines the spatial spillover effects of environmental policy stringency, GDP per capita, and fossil energy consumption on the ecological footprint in EU–14 countries over the period 1990–2020 using spatial econometric techniques. The results reveal strong and positive spatial dependence in the ecological footprint, indicating significant cross-country spillovers. Environmental policy stringency is found to reduce the ecological footprint both directly and indirectly, while fossil energy consumption and GDP per capita increase environmental pressure through significant domestic and spillover effects. Notably, indirect effects dominate direct effects, highlighting the critical role of regional interdependence in shaping environmental outcomes. These findings demonstrate that environmental policies generate ripple effects beyond national borders and emphasize the necessity of coordinated environmental and energy policies, increased investment in renewable energy, and strategies to decouple economic growth from fossil fuel dependence across the EU–14 region.
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