Inspecting the influence of renewable energy and R&D in defending environmental quality: evidence for California.

Abstract

The United Nations's Sustainable Development Goals (SDGs) is international cooperation that aims to climate change mitigation, and encourage the use of clean energy. Investing in green technology to reduce carbon dioxide (CO2) emissions is among the most important objective of the SDGs. As the USA is part of this collaboration, the present study tries to examine the progress of one State to meet the Global Goals. This paper uses the autoregressive distributed lags (ARDLs) approach and Granger causality test to evaluate the dynamic relationships uniting gross domestic product (GDP), CO2 emissions, renewable energy consumption (REC), and research and development (R&D) for the California State over the period 1987-2017. The outcome of the econometric analysis proved that REC affects CO2 emissions in the short run, and vice versa. In addition, a bidirectional relationship is detected between GDP and R&D and CO2 emissions and REC Granger causes GDP. In the long run, REC, R&D, and GDP Granger cause CO2 emissions, while REC, R&D, and CO2 emissions Granger cause GDP. We also found a bidirectional causality linking CO2 emissions and GDP. The long-run elasticities show that R&D and GDP impact positively CO2 emissions whereas REC affects it. Thus, R&D increases pollution but REC reduces it. Environmental degradation is perhaps related to the excessive consumption of fossil energy in most activities. California is advised to enhance the effort to meet the SDGs. Encouraging R&D of low carbon technologies and applying several taxations for non-renewable fuel adoption may also constitute a useful strategy to protect the environment.