Investigating the effect of the quality of institutions on the reduction of carbon dioxide emissions (a selection of members’ countries of the Shanghai Cooperation Organization)

Institutions are the informal norms and formal rules of a society and are a combination of laws, rights and decision-making through organizations that emphasize more on environmental quality which their existence has a significant impact on protecting the quality of the environment. The purpose of this study is to investigate the effect of the quality of institutions on the reduction of carbon dioxide emissions in the period from 2001 to 2021 for a selection of member countries of the Shanghai Cooperation Organization using the panel model and the generalized method of moments (GMM). The results of this research and the coefficients of the examined variables indicated a negative and significant effect of institutional quality variables and economic growth rate on CO2 emissions; and the variables of energy consumption, trade openness and population growth rate have shown a positive and significant effect on CO2 emissions. Also, the effect of industry variables and human capital on CO2 emissions has been insignificant. According to the results of this study, it is suggested that in order to reduce the CO2 emissions, the member countries of the Shanghai Cooperation Organization should adopt the following policies: improving the quality of institutions, developing of environmental organizations, freedom of media and press to cover environmental risks and also adopting legal measures such as environmental regulations and standards as well as market-based environmental policy tools such as environmental tax and reduction of government subsidies.