Climate change policies and emissions in European regions: disentangling sources of heterogeneity

Abstract

This article analyses the impact of climate change policies (CCPs) on emissions at the regional level. Using data for the entire sample of European NUTS-2 regions over a period of 26 years, we find that CCPs effectively reduce regional emissions, with the impact that materialises three years after the implementation of the policy. These effects are associated with an improvement in economic activity in the medium term, and are amplified in regions with high innovation and investment capacity, and good local institutions.