The impact of corruption on CO 2 emissions in US states

The U.S. Agency for International Development pointed out that corruption in the environmental sector diverted funds allocated for environmental programmes to private pockets through embezzlement and bribery. Thus, this study examines the impacts of corruption on CO2 emissions in US states. We investigate the relation between corruption and CO2 emissions for the three most polluting sectors, and analyse which corruption (legal or illegal) and in which branch (legislative, executive, or judicial) has the greatest impact on emissions. We use different corruption indices and different specifications and panel data methodologies. We use different periods due to data availability regarding corruption indexes. Estimates using the ‘CRI’ range from 1998 to 2013. Estimates using the ‘CCI’ range from 2002 to 2014. For illegal and legal corruption indicators, estimates range from 2014 to 2018. The findings indicate direct effects of corruption on CO2 emissions, and direct effects of legal and illegal corruption on CO2 emissions, but the illegal corruption effect is stronger. The results reveal that legal and illegal corruption in the executive branch affect CO2 emissions, and illegal corruption in the legislative branch has a direct effect. The estimates indicate corruption affects CO2 emissions in the three most polluting sectors.