Environmental Implications of R&D's Spillover Effects on Resource Use Efficiency and Renewable Energy Components

Abstract

Given the lack of consensus among experimental studies on the effects of R&D and renewable energy on CO2 emissions, this study attempted to bridge the divide. Additionally, the study contributes by examining the role of pandemics in CO2 emissions through the use of a new pandemics index. Panel data models are estimated to examine the effects of determinants of CO2 emission using annual data from 2003 to 2017 in sample of 54 countries. Our findings indicate that increased trade openness, urbanization, and GDP per capita contribute significantly to the spread of CO2 emissions. Furthermore, the negative coefficient of squared GDP per capita emphasized the environmental Kuznets curve hypothesis. Additionally, the inclusion of spillover effects from R&D resulted in a statistically significant increase in its coefficient. Moreover, despite the increasing impact of R&D on CO2 emission reductions, its indirect effects resulted in increased energy use efficiency and a reduction in the damaging environmental effects of production expansion. While renewable energy production reduces CO2 emissions, these reductions can be mitigated or improved, and in some cases, even be positive, depending on the state of R&D in the countries studied. Furthermore, our findings indicate that epidemics had a negligible effect on CO2 emissions.