Achieving Carbon Neutrality Pledge through Clean Energy Transition: Linking the Role of Green Innovation and Environmental Policy in E7 Countries

Abstract

Most countries, notably those that signed the Paris Climate Agreement, prioritize achieving the zero carbon or carbon neutrality aim. Unlike earlier studies, this one assesses the contribution of environmental policy, clean energy, green innovation, and renewable energy to the E7 economies’ achievement of carbon neutrality goals from 1990 to 2019. Findings emanating from the study show that the EKC hypothesis is valid in E7 countries. Implying that emissions in the E7 countries increased with the kick-off of development but declined later due to possible potent environmental regulatory policies put in place. Similarly, across all models, renewable energy (REN), green innovations (GINNO), environmental tax (ETAX), and technological innovations (TECH) were found to exert a negative and significant impact on carbon emissions in the E7 countries both in the short and long run. On the other hand, economic expansion (GDP) positively impacts environmental deterioration. Furthermore, the country-specific result shows that, on average, Brazil, India, China, Russia, Mexico, and Indonesia have significant environmental policies aiding carbon abatement. Except for Brazil, Mexico, and Indonesia, the income growth in the rest of the countries does not follow the EKC proposition. Furthermore, the causality result revealed a unidirectional causal relationship between GDP, REN, and GINNO to CO2 emission. No causality was found between ETAX with CO2, while a bi-directional causality exists between technology and CO2 emissions. Based on the finding, policymakers in the E7 countries should move away from fossil fuels because future electricity output will not be sufficient to reduce emissions considerably. Environmental regulations, encouraging technological innovation, adopting green and sustainable technology, and clean energy sources, among other things, demand radical and broad changes.

Renewable Energy through the Lenses of Financial Development and Technological Innovation: The Case of CEE Countries

“…Study of Jiang et al (2022) found conjecture the crowding-out effects of environmental investments on enterprise innovation-related expenditures. Another study finds that REC, environmental tax, and TI minimized the environmental degradation (Yu et al, 2022).…”

Digital development, environmental regulation, and electric power utilization efficiency

“…conducted a full theoretical analysis and empirical recommendations on carbon emission reduction in China's construction industry, and further improved the existing research on carbon emission reduction of relevant industries from the perspective of input-output analysis. Among the remaining studies on other countries in the world for low carbon, carbon neutral, Yu et al (2022) evaluated the contribution of several factors such as environmental policies and clean energy to achieve carbon neutral goals in G7 economies, and concluded that countries should abandon the use of fossil fuels to adopt clean energy sources such as electricity, thus making a radical energy change. With China's proposed carbon neutral development goal, carbon reduction actions in developed countries have become a hot issue in climate change.…”

Assessing the effect of real estate market and renewable energy on environmental quality in Belgium

“…Various studies in energy and environmental economics have assessed the link between energy utilisation and environmental quality in both panel and time series frameworks (see Adebayo, 2021; Adebayo, Oladipupo, et al, 2021; Asongu et al, 2020; Awodumi & Adewuyi, 2020; Bano et al, 2021; Hossain et al, 2022; Jahanger, Hossain, Onwe, et al, 2023; Jahanger, Hossain, Usman, et al, 2023; Jahanger, Ozturk, et al, 2023; Majeed et al, 2021; Malayaranjan & Sahoo, 2020; Qashou et al, 2022; Rafindadi, 2015, 2016a; Rafindadi & Ozturk, 2015, 2017; Rafindadi & Usman, 2021; Soylu et al, 2021; Thai‐Ha et al, 2020; Yu et al, 2022). Nevertheless, the studies that investigated the effect of renewable (REN) and nonrenewable energy (NRE) use and real estate investment on environmental quality (ENQ) need to be more detailed and restricted to panel data framework (Fan & Zhou, 2019).…”