Governance is a basic factor explaining the poor economic, social and
environmental performance of many developing countries. Since good
governance impacts the environment and management of carbon emissions,
in this study, we examine the relationship between governance and
economic performance and its impact on CO2 emissions, employing the
World Bank's Aggregate Governance Indicators. To this end, data from
Organization of the Petroleum Exporting Countries (OPEC) over 8 years
(from 2006-2015) is analyzed through spatial econometric techniques for
panel data. The results show that the governance index (with a negative
sign) and GDP growth variable (with a positive sign), have the greatest
impact on carbon dioxide emissions. The inflation rate, exports,
imports, foreign investment, and employment also have an impact on CO2
emissions. The policy recommendations of this research are that
governments can help protect the environment by adopting better
governance practices, improving the governance structure, and
implementing a clean technology strategy in production in order to
reduce greenhouse gas emissions.