Assessing the Impact of Sustainability Initiatives on Greenhouse Gas Emissions in Sweden and Finland

Batool, Aleeza and Ali, Amjad and Audi, Marc (2025): Assessing the Impact of Sustainability Initiatives on Greenhouse Gas Emissions in Sweden and Finland.

Abstract

Climate change has become a central concern in global policy discourse over the past two decades, motivating nations to adopt a wide range of sustainability initiatives. Analyzing the specific measures implemented and their effectiveness in promoting environmental sustainability is therefore critical. This study aims to evaluate the contribution of various sustainability actions to environmental preservation by focusing on Sweden and Finland, recognized for their leadership in sustainable development. Employing panel least squares and generalized method of moments methodologies using 2010-2020 data, the research rigorously assesses the impact of sustainability initiatives on environmental performance, with a particular focus on greenhouse gas emissions as the primary indicator. The empirical findings reveal that the expansion of renewable energy sources delivers the most prompt and significant reductions in greenhouse gas emissions among the interventions examined. Additionally, investments in green technologies and the issuance of green bonds are shown to enhance environmental quality, with their benefits projected to increase over time. These results highlight the necessity of prioritizing renewable energy development in national climate strategies. Building on these insights, the study presents targeted policy recommendations for Sweden and Finland. It advocates for a strategic shift from compliance-oriented environmental reporting towards the adoption of actionable policies that produce measurable emission reductions. Recommended policy measures include the promotion of sector-specific emission abatement, accelerated development of renewable energy infrastructure, and the encouragement of clean technology innovation through public investment and fiscal incentives. By comparing two Nordic sustainability leaders, Sweden and Finland, this study clarifies which targeted environmental measures are most effective within advanced institutional contexts.

• Item Type: MPRA Paper
• Language: English
• Keywords: Sustainability Initiatives, Greenhouse Gas Emissions, Renewable Energy, Environmental Performance
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics

References

Ahmad, S. (2018). Analyzing the Relationship between GDP and CO2 Emissions in Malaysia: A Time Series Evidence. Journal of Energy and Environmental Policy Options, 1(1), 1-4.

Ali, A., & Audi, M. (2016). The Impact of Income Inequality, Environmental Degradation and Globalization on Life Expectancy in Pakistan: An Empirical Analysis. International Journal of Economics and Empirical Research (IJEER), 4(4), 182-193.

Ali, A., Audi, M., & Roussel, Y. (2021). Natural resources depletion, renewable energy consumption and environmental degradation: A comparative analysis of developed and developing world. International Journal of Energy Economics and Policy, 11(3), 251-260.

Alofaysan, T., Ibrahim, M., & Mohsin, M. (2024). Eco-friendly and financial technologies, and renewable energy growth in emerging economies. Energy Economics, 130, 106943.

Ansari, A. H., Khan, S. J., & Abbas, J. (2024). Digital finance, financial inclusion, and renewable energy for environmental sustainability: Evidence from Pakistan. Environmental Science and Pollution Research, 31, 13654–13668.

Apergis, N., & Payne, J. E. (2010). Renewable energy consumption and economic growth: Evidence from a panel of OECD countries. Energy Policy, 38(1), 656–660.

Audi, M. (2024). The Role of Urbanization and Trade in Driving Carbon Emissions in Asia. Journal of Energy and Environmental Policy Options, 7(3), 23-34.

Audi, M., Poulin, M., & Ali, A. (2024). Environmental impact of business freedom and renewable energy: a global perspective. International Journal of Energy Economics and Policy, 14(3), 672-683.

Audi, M., Poulin, M., Ahmad, K., & Ali, A. (2025). Modeling disaggregate globalization to carbon emissions in BRICS: A panel quantile regression analysis. Sustainability, 17(6), 2638.

Baltagi, B. H. (2021). Econometric analysis of panel data (6th ed.). Cham: Springer.

Bonsu, J., Appiah, K., & Boamah, K. B. (2025). Fintech, green innovation, and environmental sustainability: Evidence from manufacturing firms in emerging economies. Journal of Cleaner Production, 416, 140131.

Borghesi, S., Cainelli, G., & Mazzanti, M. (2015). Linking emission trading to environmental innovation: Evidence from the Italian manufacturing industry. Research Policy, 44(3), 669–683.

Borrallo, J. M., García-Sánchez, I. M., & de la Cuesta-González, M. (2024). Green bonds and environmental performance: The moderating role of firm growth. Business Strategy and the Environment, 33(1), 110–126.

Botta, E., & Kozluk, T. (2014). Measuring environmental policy stringency in OECD countries: A composite index approach. OECD Economics Department Working Papers, 1177.

Burnett, J., Bergstrom, J. C., & Witus, L. S. (2013). Energy efficiency, greenhouse gas emissions, and economic growth: Evidence from high-income countries. Energy Economics, 36, 564–577.

Calin, A., & Horodnic, I. (2023). Determinants of CO2 Emissions and the Role of Renewable Energy in Romania. Journal of Energy and Environmental Policy Options, 6(1), 8-15.

CDP. (2022). CDP Global Environmental Disclosure Report. London: CDP Worldwide.

Charfeddine, L., Ben Rejeb, A., & Abid, M. (2024). The impact of ICT, digitalization, renewable energy, and financial development on environmental sustainability: Evidence from the world's most polluted countries. Environmental Science and Pollution Research, 31, 11708–11722.

Chen, X., Li, Y., & Wu, J. (2023). Scenario analysis of carbon reduction potential from new energy vehicles in China’s road transport sector. Journal of Cleaner Production, 399, 136919.

Climate Bonds Initiative. (2023). Annual Report 2023. London: Climate Bonds Initiative.

Dargay, J., Gately, D., & Sommer, M. (2007). Vehicle ownership and income growth, worldwide: 1960–2030. Energy Journal, 28(4), 143–170.

Emodi, S. A. (2019). Analyzing the Nexus between Energy Consumption, CO2 Emissions, and Economic Growth in Nigeria. Journal of Energy and Environmental Policy Options, 2(3), 84-94.

Energy Connects. (2022). Sweden aims for 100% renewable electricity by 2040. Energy Connects.

Eskeland, G. S., & Harrison, A. E. (2003). Moving to greener pastures? Multinationals and the pollution haven hypothesis. Journal of Development Economics, 70(1), 1–23.

EVS38. (2025). Electric vehicle statistics 2025: Nordic trends and forecasts. EVS38.

Flammer, C. (2021). Corporate green bonds. Journal of Financial Economics, 142(2), 499–516.

Fredriksson, P. G., Vollebergh, H. R. J., & Dijkgraaf, E. (2005). Corruption and energy efficiency in OECD countries: Theory and evidence. Journal of Environmental Economics and Management, 49(2), 207–229.

Ghosh, S. (2024). Renewable energy, high-tech industries, financial globalization, and environmental sustainability in newly industrialized countries. Journal of Cleaner Production, 423, 140567.

Gielen, D., Boshell, F., Saygin, D., Bazilian, M. D., Wagner, N., & Gorini, R. (2019). The role of renewable energy in the global energy transformation. Energy Strategy Reviews, 24, 38–50.

Global Reporting Initiative. (2021). Consolidated set of GRI standards 2021. Amsterdam: GRI.

Gnann, T., Plötz, P., Funke, S. A., & Wietschel, M. (2015). What is the market potential of plug-in electric vehicles as commercial vehicles? A case study from Germany. Energy Policy, 85, 351–359.

Government Offices of Sweden. (2021). Sweden’s long-term climate policy framework. Stockholm: Government Offices of Sweden.

Grossman, G. M., & Krueger, A. B. (1995). Economic growth and the environment. Quarterly Journal of Economics, 110(2), 353–377.

Gujarati, D. N., & Porter, D. C. (2020). Basic econometrics (6th ed.). New York: McGraw-Hill.

Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2022). Multivariate data analysis (9th ed.). Harlow: Pearson.

Hanvoravongchai, P., & Paweenawat, J. (2025). Economic and Environmental Dynamics in Southeast Asia: The Impact of Tourism, Gross Domestic Product, Foreign Direct Investment, and Trade Openness on Carbon Dioxide Emissions. Journal of Energy and Environmental Policy Options, 8(1), 51-65.

Haque, F., & Ntim, C. G. (2022). Corporate sustainability initiatives and carbon performance: Evidence from European firms. Journal of Cleaner Production, 356, 131834.

Hashmi, M. S., Asif, M. F., & Gohar, M. (2025). Issues and opportunities of urban water in Pakistan. Journal for Current Sign, 3(1), 384–397.

Hussain, M., & Khan, A. R. (2022). The impact of economic growth, energy consumption, and trade openness on carbon emissions in Pakistan. Journal of Energy and Environmental Policy Options, 5(3), 1-6.

Ibrahim, J., & Simian, R. (2023). Investigating CO2 Emissions Drivers: Energy Use, Economic Growth, Urbanization, and Trade Openness. Journal of Energy and Environmental Policy Options, 6(1), 1-7.

Intergovernmental Panel on Climate Change. (2021). Sixth Assessment Report: The Physical Science Basis. Geneva: IPCC.

International Energy Agency. (2023). Finland 2023: Energy policy review. Paris: IEA.

International Renewable Energy Agency. (2023). World Energy Transitions Outlook 2023. Abu Dhabi: IRENA.

Ito, Y. & Zhang, R. (2025). Examining Economic and Technological Drivers of Carbon Dioxide Emissions in Developing Countries: A Policy Perspective. Journal of Energy and Environmental Policy Options, 8(2), 1-12.

Jaffe, A. B., & Trajtenberg, M. (2002). Patents, citations, and innovations: A window on the knowledge economy. Cambridge, MA: MIT Press.

Jamel, M., & Zhang, C. (2024). Green Finance, Financial Technology, and Environmental Innovation Impact on CO₂ Emissions in Developed Countries. Journal of Energy and Environmental Policy Options, 7(3), 43-51.

Jiang, H., Wang, Q., Li, R., & Zhang, Y. (2024). Eco-innovation, carbon taxes, and renewable energy for carbon neutrality in G7 countries. Environmental Research Letters, 19(2), 024009.

Johnstone, N., Haščič, I., & Popp, D. (2010). Renewable energy policies and technological innovation: Evidence based on patent counts. Environmental and Resource Economics, 45(1), 133–155.

Karpf, A., & Mandel, A. (2018). The changing value of green bonds: Evidence from market and media reactions. Journal of Environmental Economics and Management, 90, 1–21.

Khalid, M. A., & Abdul, M. (2025). Green Growth and Human Capital in Bangladesh: Evaluating the Roles of Financial Development and Foreign Direct Investment in Reducing Carbon Emissions. Journal of Energy and Environmental Policy Options, 8(1), 1-13.

Khan, I., Hou, F., & Le, H. P. (2023). The impact of technological innovation on energy transition and carbon emissions: Evidence from G7 countries. Journal of Cleaner Production, 386, 135718.

Knable, M., Janik, A., & Kazak, J. K. (2022). The circular economy as a driver of sustainable development: Evidence from European countries. Resources, Conservation & Recycling, 182, 106282.

Kommuninvest. (2024). Green bonds impact report 2024. Kommuninvest.

Křístková, Z., Boučková, M., & Ciaian, P. (2025). Economic, social, and environmental impacts of green energy investments in the European Union. Energy Policy, 180, 113554.

Levinson, A. (2009). Technology, international trade, and pollution from US manufacturing. American Economic Review, 99(5), 2177–2192.

Li, W., Long, R., Chen, H., & Geng, J. (2016). A review of factors influencing consumer intentions to adopt battery electric vehicles. Renewable and Sustainable Energy Reviews, 78, 318–328.

Li, X., Ma, T., & Wang, Z. (2024). Renewable energy, green tax, trade openness, and carbon neutrality: Empirical evidence from BRICS countries. Sustainable Development, 32(2), 377–391.

Liao, H., Zhang, J., & Wang, S. (2025). Green finance, technological innovation, and carbon emission reduction in mineral-based Belt and Road economies. Sustainable Development, 33(1), 145–163.

Liu, Q., Zhou, Y., & Wu, X. (2025). Sustainable financing and the energy justice transformation: Evidence from developing Asian countries. Energy Policy, 184, 113438.

Lopez, B. & Peters, M. (2025). Ecological Governance and Organisational Resilience: A Structural Model of Environmental Risk in Pandemic Conditions. Journal of Energy and Environmental Policy Options, 8(2), 26-36.

Maltais, A., & Nykvist, B. (2020). Understanding the role of green bonds in advancing sustainability. Nature Climate Change, 10(2), 101–104.

Marc, A. (2025). Bridging Equity and Ecology: The Impact of Income Inequality on Green Growth Dynamics. Journal of Energy and Environmental Policy Options, 8(2), 60-71.

Marc, A., Khalil, A., Poulin, M., & Ali, A. (2025). Different Dimensions of Globalization and CO2 Emission Nexus: Application of Environmental Kuznets Curve for Worldwide Perspective. International Journal of Energy Economics and Policy, 15(3), 553.

Municipality Finance Plc. (2024). MuniFin annual report 2024. Municipality Finance Plc.

Mustapha, T. (2022). Examining the links between oil production, carbon emissions, and economic growth in Nigeria. Journal of Energy and Environmental Policy Options, 5(3), 13-21.

Narayan, P. K., & Smyth, R. (2008). Energy consumption and real GDP in G7 countries: New evidence from panel cointegration with structural breaks. Energy Economics, 30(5), 2331–2341.

NASA. (2024). Global climate change: Vital signs of the planet. National Aeronautics and Space Administration.

Nathaniel, S. P., Khan, S. A. R., & Shahbaz, M. (2024). Clean energy, globalization, and the ecological footprint: Evidence from dynamic ARDL simulations in Bangladesh. Environmental Science and Pollution Research, 31, 29147–29163.

Nordregio. (2024). Implementing the 2030 Agenda in Nordic municipalities: Status report 2024. Stockholm: Nordregio.

OECD. (2022). OECD Environmental Performance Reviews: Progress and policy recommendations. Paris: OECD Publishing.

Omri, A., & Nguyen, D. K. (2014). On the determinants of renewable energy consumption: International evidence. Energy, 72, 554–560.

Perron, P. (1989). The great crash, the oil price shock, and the unit root hypothesis. Econometrica, 57(6), 1361–1401.

Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326.

Popp, D. (2006). International innovation and diffusion of air pollution control technologies: The effects of NOx and SO2 regulation in the US, Japan, and Germany. Journal of Environmental Economics and Management, 51(1), 46–71.

Popp, D. (2019). Environmental policy and innovation: A decade of research. International Review of Environmental and Resource Economics, 13(3-4), 265–337.

Popp, D., Newell, R. G., & Jaffe, A. B. (2011). Energy, the environment, and technological change. In B. H. Hall & N. Rosenberg (Eds.), Handbook of the Economics of Innovation (Vol. 2, pp. 873–937). Elsevier.

Rahman, M. M., & Hossain, S. Z. (2024). Stakeholder awareness, green technology, governance, and access to sustainable finance in achieving SDG 12: Evidence from Bangladesh’s pharmaceutical sector. Journal of Cleaner Production, 427, 139812.

Reuters. (2025). Finland opens its first green hydrogen plant to support net-zero goals. Reuters.

Romero-Ávila, D. (2008). Questioning the empirical basis of the environmental Kuznets curve for carbon dioxide: New evidence from a panel stationarity test robust to multiple breaks and cross-dependence. Ecological Economics, 64(3), 559–574.

Rossi, S. (2023). Exploring the relationship between economic growth, energy consumption, trade openness, and carbon dioxide emissions: A case study of Italy. Journal of Energy and Environmental Policy Options, 6(3), 19-24.

Rystad Energy. (2023). Nordic countries at the forefront of the green energy transition. Rystad Energy.

Sadorsky, P. (2009). Renewable energy consumption and income in emerging economies. Energy Policy, 37(10), 4021–4028.

Scopes Data. (2024). Electric vehicle adoption in Finland: 2024 update. Scopes Data.

Singh, U., & Kumar, K. (2023). Exploring the Interconnection Between Anthropogenic Activities and Greenhouse Gas Emissions: An Empirical Study. Journal of Energy and Environmental Policy Options, 6(4), 43-53.

Sorrell, S. (2009). Jevons’ paradox revisited: The evidence for backfire from improved energy efficiency. Energy Policy, 37(4), 1456–1469.

Sorrell, S. (2018). Explaining sociotechnical transitions: A critical realist perspective. Research Policy, 47(7), 1267–1282.

Steigerwald, D. G., Vazquez-Bare, G., & Maier, M. (2021). Policy evaluation with panel data: Principles and practice. Journal of Policy Analysis and Management, 40(2), 443–465.

Stein, J. (2025). Beyond Concrete: Assessing the Role of Wetlands, Aquifers, and Mangroves in Sustainable Flood and Groundwater Management. Journal of Energy and Environmental Policy Options, 8(2), 13-25.

Stern, D. I. (2004). The rise and fall of the environmental Kuznets curve. World Development, 32(8), 1419–1439.

Stern, D. I. (2007). The effect of the Kyoto Protocol on carbon dioxide emissions. Environmental Research Letters, 2(4), 045001.

Sterpu, M., Soava, G., & Mehedintu, A. (2018). Impact of renewable energy consumption on economic growth: Evidence from European Union countries. Technological and Economic Development of Economy, 24(3), 914–932.

Subhani, M. I., Bashir, F., & Ahmed, R. (2025). Financial sector development, ESG, and sustainable corporate debt management in BRICS economies. Emerging Markets Review, 55, 100937.

Sustainable Development Solutions Network & Bertelsmann Stiftung. (2024). Sustainable Development Report 2024: From crisis to sustainable development. New York: SDSN.

Taghizadeh-Hesary, F., & Yoshino, N. (2020). Sustainable solutions for green financing and investment in renewable energy projects. Energies, 13(4), 788.

Tang, D. Y., & Zhang, Y. (2020). Do shareholders benefit from green bonds? Journal of Corporate Finance, 61, 101427.

Tech.EU. (2025). Sweden’s clean tech ecosystem: Green hydrogen, fossil-free steel, and water innovation. Tech.EU.

United Nations. (2015). Transforming our world: The 2030 Agenda for Sustainable Development. New York: United Nations.

Wang, L. & Zaman, F. (2025). Sustainability and Power in Transnational Infrastructure: The Environmental Politics of the Belt and Road Initiative. Journal of Energy and Environmental Policy Options, 8(2), 37-49.

Weber, M. (2022). Analyzing Carbon Emissions and Trade-Related Impacts on Global Emission Levels. Journal of Energy and Environmental Policy Options, 5(3), 7-12.

Wooldridge, J. M. (2001). Econometric analysis of cross section and panel data. Cambridge, MA: MIT Press.

Wooldridge, J. M. (2020). Introductory econometrics: A modern approach (7th ed.). Boston: Cengage.

World Bank. (2022). Groundswell: Preparing for internal climate migration—World Bank report. Washington, DC: World Bank.

World Health Organization. (2023). Climate change and health. Geneva: WHO.

Yadav, S., Dhir, A., & Salo, J. (2024). Green finance, governance, and renewable energy investment for CO2 emissions reduction in BRICS economies. Journal of Environmental Management, 339, 117965.

Zhang, Q. (2024). Green finance, green bonds, public-private partnerships, and technological innovation in achieving carbon neutrality: Evidence from China. Journal of Environmental Management, 346, 119207.

Zivot, E., & Andrews, D. W. K. (2002). Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis. Journal of Business & Economic Statistics, 20(1), 25–44.