Eco-labeling, carbon pricing, and CO2 emissions in the construction sector: a panel data approach for EU-27 countries and Türkiye

Purpose Despite the growing recognition of eco-labeling and carbon footprint assessment, few studies have systematically analyzed their intersection, particularly within the construction industry. This study aims to analyze the role of eco-labeling in the construction sector, particularly in Türkiye and the twenty-seven European countries (EU-27), examining its impact on construction sector carbon dioxide (CO2) emissions and sustainability. Design/methodology/approach To achieve the research objectives, panel data analysis was employed, utilizing the pooled mean group (PMG) model to examine both short-term and long-term dynamics. The study draws on data from 28 countries and integrates econometric analysis into the relationship between the construction sector services balance of trade, carbon pricing and CO2 emissions. Findings In the short run, higher net service exports in the construction sector are correlated with increased CO2 emissions. In the long run, however, carbon pricing proves to be a key mechanism for reducing emissions. Originality/value Overall, the literature highlights the effectiveness of carbon pricing and the conditional benefits of eco-labeling, but their application to the construction sector remains limited, especially in the context of Türkiye and the EU-27 countries. This study provides a comprehensive assessment of the CO2 emissions situation in the construction sector using econometric techniques. Bridging the gap between sustainability policies and empirical analysis offers insights for policymakers and industry stakeholders aiming to align construction sector growth with environmental goals.