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

Yang Yu, Magdalena Radulescu (), Abanum Innocent Ifelunini, Stephen Ogwu, Joshua Chukwuma Onwe and Atif Jahanger
Additional contact information
Yang Yu: School of Economics, Hainan University, Haikou 570228, China
Magdalena Radulescu: Department of Finance, Accounting, and Economics, University of Pitesti, 110040 Pitesti, Romania
Abanum Innocent Ifelunini: Department of Economics, University of Nigeria, Nsukka 410001, Nigeria
Joshua Chukwuma Onwe: Department of Economics, University of Nigeria, Nsukka 410001, Nigeria

Energies, 2022, vol. 15, issue 17, 1-23

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 CO 2 emission. No causality was found between ETAX with CO 2 , while a bi-directional causality exists between technology and CO 2 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.

Keywords: CO 2 emissions; green technology; zero carbon; EKC; clean energy; E7 nations (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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