The Effects of Fiscal Expenditures for the Culture and Arts Sector on Greenhouse Gas Emissions

As the culture and arts sector develops alongside economic growth, the increase in greenhouse gas emissions highlights the importance of environmental considerations in the context of climate change. This study employs a two-step estimation method using a dynamic panel model to analyze the impact of fiscal expenditure for the culture and arts sector on greenhouse gas emissions, distinguishing between direct and indirect effects. The first-stage analysis reveals that increased fiscal expenditure in the culture and arts sector positively impacts regional economic growth. The second-stage analysis indicates the presence of an inverted U-shaped curve between per-capita GRDP and greenhouse gas emissions, supporting the Environmental Kuznets Curve hypothesis. While fiscal expenditure for the culture and arts sector directly increases greenhouse gas emissions, it indirectly reduces them through regional economic growth. However, the direct effect is greater and more significant than the indirect effect, resulting in a net increase in greenhouse gas emissions. These findings suggest that for effective greenhouse gas reduction policies at the local government level, it is necessary to improve energy efficiency in cultural and artistic activities and promote the use of eco-friendly energy sources. Additionally, there is a need for support that can raise environmental awareness among cultural and artistic professionals and induce changes in their energy consumption patterns.