Can environmental and fiscal policy effectively curb environmental degradation? The threshold role of geopolitical risk

Can environmental and fiscal policy effectively curb environmental degradation? The threshold role of geopolitical risk | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Article Can environmental and fiscal policy effectively curb environmental degradation? The threshold role of geopolitical risk Rui Jiang This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-6119450/v1 This work is licensed under a CC BY 4.0 License Status: Under Revision Version 1 posted 19 You are reading this latest preprint version Abstract Addressing climate change as the global challenge necessitates formulating stringent environmental and fiscal policies to achieve sustainable economic development. This paper applied FMOLS method to assess how environmental policy stringency and fiscal policy influence environmental degradation based on panel data in the G7 and E7 countries during 2000 to 2020. Additionally, a panel threshold model was employed to analyze the influence of geopolitical risk on the effectiveness of environmental policy. The results demonstrate heterogeneity in the impact of different policies on environmental outcomes. Stricter environmental regulations exhibit a lasting positive influence on environmental quality within the G7 countries, effectively reducing the ecological footprint. Conversely, in the E7 countries, environmental policy stringency correspondingly increases the ecological footprint. Tax revenue and government expenditure both have significant negative effects on environmental degradation in the G7 countries, with tax revenue proving more effective. In the E7 countries, government expenditure plays a stronger role in inhibiting environmental degradation than tax revenue. Moreover, geopolitical risks enhance the mitigation ability of environmental policies on ecological footprint in the G7 countries, while exacerbating the damage effect in the E7 countries. Based on these findings, policy recommendations are proposed. Social science/Development studies Social science/Environmental studies Social science/Geography Social science/Social policy Environmental policy stringency Fiscal policy Geopolitical risk Threshold effect Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Under Revision Version 1 posted Editorial decision: Revision requested 11 Aug, 2025 Reviews received at journal 23 Jun, 2025 Reviews received at journal 23 Jun, 2025 Reviews received at journal 21 Jun, 2025 Reviews received at journal 17 Jun, 2025 Reviewers agreed at journal 13 Jun, 2025 Reviewers agreed at journal 12 Jun, 2025 Reviewers agreed at journal 12 Jun, 2025 Reviewers agreed at journal 12 Jun, 2025 Reviewers agreed at journal 12 Jun, 2025 Reviews received at journal 07 May, 2025 Reviewers agreed at journal 24 Apr, 2025 Reviewers agreed at journal 21 Apr, 2025 Reviewers agreed at journal 21 Apr, 2025 Reviewers invited by journal 03 Apr, 2025 Editor invited by journal 03 Apr, 2025 Editor assigned by journal 18 Mar, 2025 Submission checks completed at journal 18 Mar, 2025 First submitted to journal 27 Feb, 2025 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. 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