Decoupling trends of emissions across EU regions and the role of environmental policies

The paper combines grid-level data of eight emission types –CO2, N20, CH4, NH3, NOX, PM10, PM2.5, and SO2 – with sub-national economic data to create a 1995–2015 balanced panel for NUTS 2 regions in EU countries. Regions on average show decoupling of emissions from output but most of the emission reductions are achieved before the 2008 financial crisis. Post 2008, very weak decoupling and even coupling can be observed. Using OECD’s Environmental Policy Stringency (EPS) Index as an intervention variable, an event study analysis shows that strong policies significantly reduce emissions, but there is considerable heterogeneity in the response by emission types and regional income levels.