Quantile-based insights into the impact of public environmental protection expenditures and renewable energy on sustainability performance in the EU-27

This study examines how government environmental protection expenditures and renewable energy consumption influence environmental sustainability in the 27 European Union (EU-27) countries from 1995 to 2022. Environmental quality is assessed using the Environmental Performance Index (EPI), a comprehensive composite indicator that captures multiple dimensions of ecological sustainability. To address heterogeneity among countries with varying environmental performance, the analysis employs the Method of Moments Quantile Regression (MMQR), which allows for the evaluation of policy effectiveness across the entire conditional distribution of the EPI. The results indicate that environmental protection expenditures exert a statistically significant and positive impact on environmental quality mainly in countries in the lower quantiles of the EPI distribution, indicating that fiscal interventions are most effective where baseline environmental performance is relatively weak. This effect diminishes at higher quantiles, suggesting a saturation threshold in more environmentally advanced EU member states. In contrast, renewable energy consumption demonstrates a robust and consistently positive effect across all quantiles, underscoring its role as a effective tool for enhancing environmental sustainability within the EU-27. By replacing fossil fuel – based energy with renewables, EU-wide renewable energy expansion improves EPI by lowering air pollution, and enhancing ecosystem vitality. These findings align with Sustainable Development Goal 7 by highlighting the environmental benefits of renewable energy deployment, and with Sustainable Development Goal 13 by emphasizing the importance of targeted public expenditures in strengthening climate resilience. Overall, adaptive and differentiated policy frameworks are essential for translating quantile-specific insights into effective strategies for achieving sustainable environmental outcomes across the EU-27.