Energy policy uncertainty and pollution emissions: Investigating the mediating mechanism of energy consumption dynamics in powerhouse eight (PHE) countries

The primary objective of the study is to unravel the nuanced connections between EUI (energy uncertainty index), energy consumption dynamics, and CO2 emissions. Employing ARDL estimation on a comprehensive dataset of PHE (powerhouse eight) countries over the period 1996–2019, the study analyzes the effects of EUI on pollution emissions and energy consumption dynamics. The findings reveal a significant positive connection between EUI and CO2 emissions, shedding light on how policy volatility can contribute to environmental challenges. Moreover, the study uncovers the direct impact of FFE (fossil fuel energy consumption) and a negative impact of REC (renewable energy consumption) on pollution emissions. Specifically, it is observed that EUI leads to an enhancement of pollution emissions. The rise in pollution emissions driven by EUI is largely facilitated by energy consumption patterns, which serve as a pathway for transmitting the effects of EUI on environmental degradation. The study offers practical insights for policymakers, emphasizing the need for stability and clarity in energy policies to mitigate adverse environmental impacts. The study's novelty lies in its inclusive analysis of the interplay between energy policy uncertainty, energy consumption dynamics, and pollution emissions.