Synergizing energy investments, environmental taxation, and innovative technology within carbon neutrality targets of E7 bloc: Do institutional pathways and structural changes matter?

Bright Akwasi Gyamfi, Stephen Taiwo Onifade, Elvis Kwame Ofori and Stephen Prah

Applied Energy, 2025, vol. 381, issue C, No S030626192402508X

Abstract: Carbon neutrality targets are laudable goals among all and sundry. However, the pathways to these goals remain a subject for broad discussion in the environmental debates. We explore how a more sustainable environment can be achieved via green finance, green innovative technology, and environmental fiscal regulations. Green finance was discussed as a public-private investment for energy. The empirical exploration essentially takes the lead initiative by integrating the moderating paths of structural changes and institutional quality (IQ) in the top emerging seven economies (E7). These economies notably contribute over 45 % of global carbon emissions. Thus, a robust analysis of the bloc's panel data (2000−2022) via the Augmented Mean Group (AMG), Driscoll-Kraay, and the Quantile-on-Quantile Regression techniques provides insightful information on the research focus. Firstly, we observed that green finance and environmental taxes significantly reduce carbon emissions in these top-emitting economies. Secondly, environmental regulation with(out) carbon taxes showed divergent impacts. Regulations without carbon tax in the model show a significant positive effect on emissions contrary to when the carbon tax was included. Thirdly, the duo of structural changes and IQ dampens the bloc's emissions. The specific pathways to achieve 15 %, 30 %, and 50 % reductions in environmental pollution using statistical model's coefficients suggest that financial strategies should be customized to each country's needs, with China and Russia benefiting from substantial green finance initiatives, while countries like India may focus on optimizing existing resources. Overall, the research suggests that the bloc can achieve SDG-7 of a quest for global access to sustainable energy and SDG-13 of climate action by leveraging innovative technology adoption and green funding measures vis-à-vis robust carbon tax regulations and implementations.

Keywords: Green innovative technology; Green finance; Environmental tax; Sustainable environment; E7 economies (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1016/j.apenergy.2024.125124

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