The Asymmetric Role of Financial Commitments to Renewable Energy Projects, Public R&D Expenditure, and Energy Patents in Sustainable Development Pathways

Mohammed Alnour, Abdullah Önden, Mouad Hasseb, İsmail Önden, Mohd Ziaur Rehman, Miguel Angel Esquivias () and Md. Emran Hossain
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Abdullah Önden: Department of International Trade and Finance, Yalova University, Yalova 77200, Turkey
Mouad Hasseb: Fabrikod, Yalova University, Yalova 77200, Turkey
İsmail Önden: Department of Artificial Intelligence and Data Engineering, Faculty of Computer and Information Technologies, Istanbul University, Istanbul 34452, Turkey
Mohd Ziaur Rehman: Department of Finance, College of Business Administration, King Saud University, P.O. Box 71115, Riyadh 11587, Saudi Arabia
Miguel Angel Esquivias: Faculty of Economics and Business, Airlangga University, Surabaya 60286, Indonesia

Sustainability, 2024, vol. 16, issue 13, 1-18

Abstract: To address the climate change impact, governments around the world have made financial commitments to dedicate a significant portion of their budgets to “research and development (R&D)” related to cutting-edge technology development. However, there is limited research in the literature that has examined the effects of financial commitment to renewable energy projects and public R&D on the environment and economic growth. Thus, this study is an endeavor to investigate the impact of financial commitments to renewable energy enterprises, public research and development expenditure, and energy technology innovation on CO 2 emissions (CO 2 e) and economic growth for 34 countries over the period 2010–2019. This study performs a nonlinear panel analysis using the “panel non-linear autoregressive distributed lag (PNARDL)” model within the frameworks of the “Environmental Kuznets Curve (EKC) hypothesis and Solow growth model”. The findings reveal that financial commitments do not possess sufficient power to explain fluctuations in CO 2 e and economic growth in the short term. However, contrasting results are obtained in the long run, when the decreasing effect is more prominent than the growing effect. Moreover, an increase in public R&D expenditure significantly reduces pollution in the long term. This research also found that energy patents have no reliable power to explain the variation in economic growth. In addition, our results do not explicitly disclose the validity of the EKC argument. Accordingly, this study discussed in detail the green policy suggestions that promote the use of renewable energy and enhance the public–private partnership in the fight against climate change.

Keywords: green finance; SDGs; financial commitments; R&D spending; PNARDL; renewable energy technologies; energy technology innovation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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