Political risk and environmental degradation in Greece

Purpose The main objective of this study is to identify the nonlinear and long-term effects of political risk on environmental degradation in Greece. It takes into account economic growth, primary energy consumption, and globalization to provide new insights that can guide the policy development process. This is crucial for achieving Greece's target of carbon neutrality by 2035. Design/methodology/approach Within this perspective, the study emphasizes the effect of political risk while controlling economic growth, globalization, and primary energy consumption; includes quarterly data between 1990/Q1 and 2019/Q4; and employs a nonlinear autoregressive distributed lag (NARDL) technique. Findings The empirical outcomes reveal that (1) there is a long-run cointegration between environmental degradation in Greece and political risk, economic growth, globalization, and primary energy consumption; (2) positive and negative changes in political risk have reduced environmental degradation; (3) primarily energy consumption, globalization and economic growth increase CO2 emissions. Originality/value No study incorporates a dynamic empirical analysis of political risk to identify its nonlinear and long-term effects on environmental degradation in Greece, considering factors such as economic growth, primary energy consumption, and globalization. To contribute to the existing literature and spark new debate, the present study aims to investigate the asymmetric effect of political risk on environmental degradation in Greece, using quarterly data from 1990Q1 to 2019Q4. The findings suggest that changes in political risk, whether positive or negative, help reduce environmental degradation, highlighting the importance of a stable political landscape for environmental improvement.