Climate Mitigation Innovations From National Legislation Under Risk Conditions

Most nations across the globe have already embraced climate legislation to tackle the challenge of climate change. This article considers the role of country risk (i.e., economic risk, financial risk, political risk, and climate physical risk) in affecting the relationship between climate mitigation legislation (CML) on climate mitigation innovations (CMIs) using a panel of 130 countries from 1995 to 2022. The findings show that CML generally promotes CMI. However, moderating effects reveal that country risk can weaken the positive impacts of CML on CMI, underscoring the importance of integrating risk management into legislative frameworks to drive CMI. Asymmetry checks show that the direct and moderating effects are more pronounced in countries with greater CMI, suggesting that greater CMI requires stronger risk mitigation. Heterogeneity analysis reveals the moderating effect of risks on the impact of CML on CMI differs significantly between developed and developing countries, with developing countries facing a more urgent need for climate risk management.