Political Economy of Environmental Poverty: The Role of Political Risk and Income Level

Environmental poverty is a global concern for developed and developing economies, particularly in light of sustainable development goals.Unlike previous research, this study evaluates the role of political risk index and income level on environmental poverty in developed regions, namely, OECD economies in the period 2004-2022.We also examine the role of renewable energy consumption.We initially developed a multidimensional index for assessing weighted average environmental poverty alongside a novel index to gauge political risk within OECD economies.We employ several panel econometric procedures, including cross-sectional dependence and slope heterogeneity, CIPS unit root circle for identifying unit roots and Westerlund cointegration for long-run connection among variables.Besides, the study employed cross-sectional autoregressive distributive lags (CS-ARDL) to identify the short-run and long-run impact of explanatory variables on environmental poverty.The results show that variables are heterogenous and cross-sectionally dependent.Moreover, the unit roots are found within the unit root circle, implying that variables are static at the first difference and long-run equilibrium exists among variables.The empirical results confirm that the political risk index reduces environmental poverty.A one-percent increase in the betterment of the political risk index lowers environmental poverty by -0.022% and -0.034%, respectively.However, the results for PRI in the short run are inconclusive while effective Politick ekonomie 2025