Analyzing the impacts of renewable energy, patents, and trade on carbon emissions-evidence from the novel method of MMQR.

Abstract

Achieving sustainable development necessitates proactive measures to mitigate the economy's negative impact on environmental standards. A new empirical association between renewable energy patent innovation and net international trade on carbon emissions in ASEAN countries from 1990 to 2021 is presented, along with its significance. Using present panel data techniques, this study investigates the connections between these factors. Second-generation cointegration and unit root tests, as well as a novel method of Moments Quantile Regression, are used in the econometric procedure. Compared to standard quantile regression, this method is more resistant to outliers and provides an asymmetric relationship between the variables. The findings show that trade increases carbon emissions in countries with medium to high emissions, that patent innovation contributes to increasing emissions, and that renewable energy mitigates carbon emissions in countries with low to medium emerging economies. Our results are consistent with other specifications, including quantile regression canay (Canay 2011), fully modified, dynamic, and fixed effect regressions, proving the EKC hypothesis. These countries need to prioritize greener products and adopt advanced manufacturing technologies to reduce carbon emissions from consumption. However, as prosperity increases, it also leads to higher consumption-based carbon emissions, worsening ecological damage in the region. Implementing policies like trade synchronization and increasing investment in patent innovations are proposed in this study to lower the current level of carbon emissions.