Exploring aggregated and disaggregated environmental impacts of biofuels: Do affluence, green technological innovation and green finance matter for top biofuel-abundant economies?

Yuan Qi, Ridwan Lanre Ibrahim and Mamdouh Abdulaziz Saleh Al-Faryan

Energy & Environment, 2025, vol. 36, issue 1, 291-322

Abstract: The unceasing ravaging effects of global warming have made the world rethink the choice of energy consumption, with policymakers pushing for an unconditional transition to sustainable energy believed to be eco-friendly. Although studies have emerged with a view to unravel the path to global environmental sustainability, the paths of biofuels remain scantly investigated. Hence, this study presented the maiden empirical support for the aggregated and disaggregated impacts of biofuels on environmental sustainability in five top biofuel-abundant economies (Brazil, China, Germany, Indonesia, and the United States) from 1995 to 2019. The papers add to the existing knowledge by considering the roles of green technological innovation (proxied by environmental-related technologies), affluence, green finance, population and coal in a novel STIRPAT framework. The stated model is empirically verified based on recent techniques encompassing CS-ARDL, CCEMG, AMG, and MMQR. The empirical results uncover that both effects of biofuels substantially moderate carbon emissions, thus paving the way for environmental sustainability. Besides, environmental-related technologies and green finance significantly mitigate carbon emissions, whereas affluence, population, and coal positively drive carbon emissions. The empirical regularity of the main estimators is confirmed based on the feedback from MMQR which uphold the validity of biofuels in mitigating carbon emissions at different quantiles. The outcomes of the causality analysis uncover unidirectional, bidirectional and non-causal nexuses. Policy insights that promote sustainable exploration of biofuels for achieving a carbon-neutral environment are exposited following the findings.

Keywords: Biofuels; affluence; green technological innovations; green finance; CO2 emissions (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:engenv:v:36:y:2025:i:1:p:291-322

DOI: 10.1177/0958305X231181673

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