Balancing well-being and environment: The moderating role of governance in sustainable development amid environmental degradation.

In the context of sustainable development goals, the topic of subjective well-being (SWB) has gained the primary focus of the academic community and policymakers. It appears that a variety of economic, social, political, and environmental factors influence SWB. Given that, the current study aims to examine the empirical relationship between SWB and carbon emissions (CO2) in the presence of governance. In particular, we look at South Asia's experience from 2000 to 2021 to examine the ability of governance to moderate the detrimental impact of environmental degradation on SWB. The analysis takes into account six governance indicators. Using the fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) techniques, we discover that (i) CO2 emissions have a negative impact on SWB; (ii) the impact of the governance is positive and significant on SWB; and (iii) the interaction between the governance and CO2 emissions has a positive and statistically significant impact on SWB. The moderating influence of governance indicates that the government should exercise the practices to strengthen effective governance in the country to improve SWB by reducing CO2 emissions. This study extends the previous literature by examining the moderating impact of governance on the relationship between CO2 emissions and SWB in South Asian economies.