Towards Sustainable Environment in G7 Nations: The Role of Renewable Energy Consumption, Eco-innovation and Trade Openness

Abstract

Some of the globe’s most economically advanced nations make up the G7 (Canada, Japan, France, Germany, Italy, United States and United Kingdom). Nevertheless, in tandem with such strong economic growth, the environmental conditions in these nations have deteriorated, raising serious issues among stakeholders. Therefore, we examine the effect of eco-innovation and trade openness on CO2 emissions in G7 nations. We also take into account the role of renewable energy, economic growth and nonrenewable energy use using a dataset covering the period from 1990–2019. We employed recent econometric techniques such as slope heterogeneity (SH) and cross-sectional dependence (CSD), Westerlund cointegration, fully modified ordinary least square (FMOLS), dynamic ordinary least square (DOLS), panel quantile regression and panel causality tests to assess these associations. The outcomes of the CSD and SH tests disclosed that using a first-generation unit root test will produce biase outcomes. Furthermore, the outcomes of the Westerlund cointegration disclosed support long-run association between CO2 and its drivers. In addition, the results of the long-run estimators (FMOLS and DOLS) unveiled that nonrenewable energy and trade openness contribute to the damage to the environment while economic expansion, renewable energy and eco-innovation enhance the quality of the environment. Furthermore, the outcomes of GDP, REC and ECO curb CO2 while NREC energy and TO surge CO2. Finally, the outcomes of the panel causality test unveiled that CO2 emissions can be predicted by all the exogenous variables.

Toward sustainable environment in Italy: The role of trade globalization, human capital, and renewable energy consumption

“…Using the method of moment quantile regression (MMQR) approach, the authors established that GDP worsens the environment quality. Similarly, the research of Olanrewaju et al 35 on the GDP-ECF interaction in WAME economies affirms that GDP stimulates ECF. Furthermore, Zhang et al 36 investigated the interconnection between GDP and ECF in five emerging economies and found that GDP triggers ECF.…”

The impact of green innovation and renewable energy on CO2 emissions in G7 nations

“…For example, within the context of G7 countries, Sharif et al [ 31 ] reported that green innovation and green financing promote environmental sustainability through reducing CDEs. Similarly, Olanrewaju et al [ 5 ] examined the impact of eco-innovation and trade openness on CDEs and found that eco-innovation improves environmental quality. Akram et al [ 30 ] noted that environmental innovations have a negative and significant impact on CDEs in both the short and long term, thereby contributing to the achievement of carbon neutrality within G7 countries.…”

“…In the G7 context, Olanrewaju et al [ 5 ] investigated the impact of RE and non-RE use on environmental damage using a variety of econometric techniques. The results of long-term estimators proved that the use of non-RE contributes significantly to the increase of CDEs, while the increase of RE consumption leads to better environmental quality.…”

“…While the extreme use of non-renewable energy has increasingly degraded the environment on which human beings depend and hampered the sustainable growth of the global economy [ 4 ]. Nations worldwide are actively championing energy conservation, with governments, companies, and scientists increasingly directing their attention towards investments and use of renewable energy (RE) [ 5 ]. Besides promoting the environment by reducing CDE, the growth of the RE industry has a key role in economic growth in general and, in particular, it promotes related industries, creates new jobs, alleviates poverty, and serves as an engine to transform macroeconomic development [ 6 , 7 ].…”

“…Accordingly, this research differs from previous studies, such as those by Refs. [ 5 , 30 , 31 ] as it provides valuable insights into the impact of country-level eco-innovation and public investment in RE on CDEs. Second, this research provides insights to the effect of cultural aspects on CDE by using all the six national culture dimensions of Hofstede et al, [ 32 ].…”