Abstract
The increasing global attention on climate change underscores the importance of alternative energy technologies with emission reduction effects. However, there are several caveats of economic productivity and environmental sustainability tradeoffs that require empirical consideration—owing to long-term effects on climate change. Here, we examine the relationship between emissions, green energy-based innovations, and energy research and development across energy-intensive OECD countries while accounting for industrial structure dynamics. We utilize several novel time series and panel estimation techniques including time-varying causality, defactored instrumental variable-based homogeneous, and heterogeneous slope dynamics that control for unobserved common factors. Our empirical assessment emphasizes the significance of energy research and development in expanding green energy innovations while reducing long-term emissions. Conversely, continual dependence on obsolete energy research and development may worsen environmental sustainability. However, the inclusion of green energy technologies offset environmental pollution without compromising economic productivity. Besides, the mitigation effect of energy research and development is channeled through a decline in energy intensity and technological advancement. We show that green energy-based innovations and energy research and development play a critical role in achieving environmental sustainability in OECD countries.
Highlights
This study examined the impact of green energy innovation, energy research and development, energy intensity, and industrial structure on emissions across OECD countries
The growing interest in energy research and development can be attributed to the harmful effects of climate change and its impacts due to the overdependence on fossil fuel technologies, rapid deforestation, urban sprawl, economic productivity, and natural resource depletion [31,32,33]
Our empirical assessment highlights the importance of energy research and development in expanding green energy innovations while reducing emissions
Summary
Reducing biodiversity, declining global food production, rising sea levels, and higher morbidity rates are examples of the possible problems associated with global warming [1,2]. Energy acts as a double-edged sword by serving as a vital condiment of economic growth and development—whereas driving environmental degradation [4]. As a result of the triple-headed scourge of climate change, resource depletion, and environmental degradation, green industries are on the rise [5]. Green industries are industries that adopt green innovation in production processes. Green innovation connotes a series of introduced practices, techniques, technologies, and systems as well as products resulting from reduced environmental degradation [6]
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