Dynamics of renewable energy research, investment in EnvoTech and environmental quality in the context of G7 countries

Abstract

The purpose of this study is to investigate the influence of renewable energy research and development (R&D) investment and the environment-related technological innovations, on the quality of the environment of the G7 economies over a period spanning from 1990 to 2020. The role of economic growth, R&D, and human capital has also been examined. For this very purpose, Panel data approaches, such as slope heterogeneity and cross-section dependence, have been used. All the variables taken into account are found in the long run cointegration association. The study also uses the novel Method of Moment Quantile Regression to determine the individual impact of each variable. The examined results have asserted that economic growth and human capital are positively associated with carbon emissions. Whereas the development of environment related technologies significantly reduce the level of emissions. On the other hand, R&D and renewable energy R&D exhibit a U-shaped influence on carbon emissions. The Dumitrescu and Hurlin Granger panel causality test reveals a bidirectional causal association of carbon and all the other variables taken into consideration. These results are found robust, as validated by the quantile regression. Based on the empirical results, this study suggests enhancing the financing efforts towards R&D, renewable energy R&D, and environment-related technological innovations, in order to attain environmental sustainability.