Abstract
Climate change resulting from a rapid increase in greenhouse gas (GHG) emissions is adversely affecting humanity. If the GHG emission continues to rise at the current pace, humanity will face severe consequences and reverse all the progress made. This paper, therefore, uses relevant data from 14 developing countries in Asia from 1990 to 2018 to examine the potential impact of environmental innovation on CO2 emissions by controlling globalization, urbanization, and economic growth. The number of environmental-related technology patents is used as a measure of environmental innovation. We employed a panel long-run regression model — FMOLS, PCSE, and FGLS to estimate the elasticity of CO2 emissions. For causal association among variables, we used Dumitrescu-Hurlin Granger causality tests. Our results show that renewable energy consumption and globalization have a significant impact in reducing CO2 emissions, while environmental technology innovations play a meager role in reducing emissions and only when economic growth support those type of investment. Furthermore, we found urbanization, oil consumption, and economic growth is detrimental to the environment, which is also evident in past studies. Therefore, countries should invest in renewable energy and environmental innovation aligned with the growth to reduce GHG emissions.
Highlights
Economic growth accompanied by rapid urbanization, industrialization, digitalization, and technology improvement and innovation has dramatically improved the Responsible Editor: Roula Inglesi-LotzSince the declaration of United Nations (UN) Sustainable Development Goals (SDGs), reduction of environmental pollution through the adoption of green technology is one of the goals for developing countries
The results imply that energy consumption, economic growth, urbanization, and environmental technology patent are correlated with CO2 emissions in the long run
Our result shows the presence of bidirectional causality running from environmental technology, globalization, GDP, renewable energy, energy, and urbanization to C O2 emission and vice-a-versa in developing Asia
Summary
Economic growth accompanied by rapid urbanization, industrialization, digitalization, and technology improvement and innovation has dramatically improved the Responsible Editor: Roula Inglesi-LotzSince the declaration of United Nations (UN) Sustainable Development Goals (SDGs), reduction of environmental pollution through the adoption of green technology (i.e., renewable energy consumption and innovation of new energy sources) is one of the goals for developing countries Recent studies show that innovation in environmental technology and increased use of/switching to green energy has played a crucial role. Developing Asia is experiencing rapid economic growth, industrialization, and economic transformation and is considered a significant emitter of GHG emissions (Hanif et al 2019; Hashmi et al 2021; Lu et al 2017; Mohsin et al 2021). Rapid growth and economic transformation through increased consumption of non-renewable energy, less efficient technology, exploitation of natural resources, and limited investment in environmental protection and restoration (Ahmed et al 2022; Lee et al 2022) has significantly worsened the environmental degradation process. Past studies argue that higher economic growth and globalization could lead to technological innovation in the energy sector, resulting in reducing environmental pollution (Zaidi et al 2019a, b; Chaudhry et al 2021; Abid et al 2021). The energy sector contributes to about 73.2% of the GHG emission while agriculture, forestry, and land use contribute 18.4%, the direct industrial process contributes 5.2%, and waste contributes 3.2% (Olivier and Peters 2020)
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