Climate Governance and Pollution Mitigation Pathways for Achieving the 2030 Sustainable Development Agenda

Abstract

Effective climate governance is essential for achieving the Sustainable Development Goals, particularly SDG 7 (Affordable and Clean Energy), SDG 12 (Responsible Consumption and Production), SDG 13 (Climate Action), and SDG 16 (Strong Institutions). This study examines the moderating impact of economic policy uncertainty and energy justice on the nexus between carbon taxation and greenhouse gas (GHG) emissions within 39 OECD countries over the period 1990–2024. Grounded in Ecological Modernization Theory, the study argues that the environmental effectiveness of market‐based climate policies depends significantly on institutional stability and socially inclusive energy transition frameworks. Using the two‐step System GMM estimator alongside robustness techniques including Quantile Autoregressive Distributed Lag (QARDL), Difference‐in‐Differences (DiD), COVID‐19 sensitivity analysis, and Granger causality tests, the study provides robust empirical evidence regarding climate governance effectiveness. The findings reveal that carbon taxation significantly reduces carbon dioxide (CO 2 ), methane (CH 4 ), nitrous oxide (N 2 O), and greenhouse gas emissions across OECD countries. However, economic policy uncertainty increases greenhouse gas emissions and weakens the environmental effectiveness of carbon taxation by discouraging long‐term green investments and sustainable technological transformation. In contrast, energy justice significantly reduces emissions and strengthens the effectiveness of carbon taxation through socially inclusive and equitable energy transition processes. The study contributes to the climate governance and environmental economics literature by integrating carbon taxation, institutional stability, and energy justice within a unified analytical framework. The findings suggest that effective climate governance requires stable policy environments, equitable energy transition mechanisms, and strengthened carbon pricing systems to accelerate pollution mitigation and support broader SDGs.