RESEARCH
Constantinos
Saravakos
The relationship between green transition and economic freedom: Is economic freedom compatible with sustainability?
This policy paper seeks to explore the relationship between economic freedom and sustainability. It begins by reviewing the empirical literature on how economic freedom's impact on sustainability can vary significantly based on specific contextual factors. Some studies indicate a positive correlation between greater economic freedom and improved environmental outcomes, particularly in countries that prioritize business-friendly environments, uphold strong property rights, and foster trade freedom. In these cases, economic freedom appears to contribute positively to environmental sustainability and reduced emissions. Conversely, economic freedom may exert adverse effects on environmental conditions, particularly in developing and emerging economies, where factors like limited regulatory control and unsustainable economic growth are associated with environmental degradation.
