Abstract
This study develops an innovative empirical approach based on System Generalized Method of Moment method to explore the moderating effects of renewable energy investment and governance quality on the relationship between environmental degradation and life satisfaction using a sample of 36 emerging countries covering the period 2005-2014. Different categories of governance and environmental degradation are included in the analysis. The results highlight five key points: (i) there exists an unconditional impacts of the four indicators of environmental degradation on decreasing life satisfaction in all the estimated models; (ii) the conditional impact renewable energy increases life satisfaction in most of the estimated models; (iii) the conditional impact of governance quality, particularly general and economic governance, increases the level of life satisfaction; (iv) the interaction impacts of renewable energy and the indicators of environmental degradation on life satisfaction are positive in all the estimated models, meaning that renewable energy could be used as a policy variable that moderates the negative influence of the environmental degradation indicators on life satisfaction are positive in most of the estimated models, indicating that good governance, particularly economic and institutional governance, could be used as a policy factor that moderates the adverse influence of environmental degradation on life satisfaction.