This study aims to assess the cumulative effect of environmental policy stringency on the EU’s energy transition up to ten years, controlling for geopolitical risk and a set of climatic and socioeconomic factors. The empirical analysis is based on a sample of 12 EU member countries and the UK over the period 1991-2020. It is performed at the aggregated and disaggregated levels per sub-index of environmental policy stringency and per source of renewable energy. The study outcomes suggest that stringent environmental policies boost energy transition in the EU. This effect is more pronounced in the long run, so a one-point increase in the EPS index is associated with 6.4% increase in the share of renewable energy consumption. The disaggregated analysis reveals that market-based policies are the most influential policies compared to non-market and technology-based policy measures. It also highlights that wind power is the most incentivised renewable energy source by stringent environmental policies, in contrast to hydropower, which is hindered by these policies. The study findings stress the importance of implementing dynamic, adaptive and energy source-specific environmental policies for a sustainable energy transition.
This paper examines the importance of technological infrastructure in influencing sustainable investment, with particular reference to gross fixed capital formation (GFCF) and foreign direct investment (FDI). We use principal component analysis (PCA) and data envelopment analysis (DEA) to uncover the structural interdependences among digital readiness, innovation capacity and macroeconomic stability. Countries that are identified as DEA-efficient, with high internet penetration, extensive mobile uptake and strong high-tech exports, are consistently receiving greater investment. Inflation impacts economies in different ways, it prevents capital accumulation in less efficient economies and it helps promote investment in more efficient economies. This highlights the importance of context sensitive macroeconomic strategies. Unemployment is still a big hurdle to sustainable investment, limiting GFCF and FDI especially in economies with structural rigidities. The outlier analysis identifies Vietnam, China and Malta as examples of ICT-driven investment resilience, while Sudan illustrates how structural and labor-market constraints can impede capital accumulation despite moderate digital progress. A robust digital infrastructure, innovation capacity and a stable macroeconomic and labor-market are essential to sustain competitive investment strategies. This alignment of factors strategically promotes inclusive growth and long-term investment resilience in countries. It provides actionable guidance to policy makers and business leaders to advance sustainable economic development.
The debate on natural resource rents financing the Sustainable Development Goals (SDGs) contrasts "resource curse" and "resource blessing" paradigms, yet evidence on heterogeneous effects by resource type is limited. This study examines disaggregated rents from oil, natural gas, minerals, and forests on the economic, social, and environmental dimensions of the 17 SDGs in 30 resource-rich countries from 1995 to 2022. Using a multi-method approach (double-censored Tobit model, fixed effects with Driscoll-Kraay standard errors, and two-step system GMM), results show that aggregate rents positively affect the composite Sustainable Development Index. However, oil rents consistently harm all SDG dimensions, supporting the resource curse. In contrast, natural gas, mineral, and forest rents positively influence the three dimensions, indicating a conditional resource blessing under good governance. Findings suggest that the resource curse is oil-driven, while non-oil resources offer strong potential to advance the SDGs through transparent management, sovereign wealth funds, and strategic investments.
PurposeThis study examines the evolving role of green and conventional cryptocurrencies in systemic risk transmission within global financial markets, focusing on environmental sustainability. It specifically assesses whether ESG-aligned tokens act as financial safe havens or contribute to systemic vulnerabilities. Design/methodology/approachUsing a time-varying parameter vector autoregressions (TVP-VAR) framework, the analysis covers 2020–2025 and investigates dynamic connectedness, volatility propagation and shock transmission among selected digital assets across multiple market conditions. FindingsThe results show that environmentally sustainable cryptocurrencies, such as ADA and XRP, frequently serve as dominant transmitters of volatility across both stable and turbulent market conditions. In contrast, traditional proof-of-work cryptocurrencies, including Bitcoin (BTC) and Litecoin (LTC), tend to act as volatility absorbers, largely owing to their liquidity depth and central positions within the network. These findings directly challenge the widespread assumption that ESG-aligned tokens inherently offer financial resilience. Practical implicationsThe results provide valuable guidance for portfolio managers, ESG-oriented investors and regulators, emphasizing that sustainability credentials alone do not ensure systemic stability. Market microstructure factors, including liquidity, investor composition and network effects, are critical for effective risk management. Originality/valueThis study is among the first to systematically integrate environmental sustainability into the analysis of systemic risk in cryptocurrency markets. By revealing the paradoxical role of green tokens as potential volatility transmitters and highlighting the critical influence of market microstructure, it provides insights that bridge financial stability, ESG investment strategies and regulatory policy. The findings offer a robust foundation for both future academic research and the design of more informed, resilient and environmentally conscious financial frameworks.
