Modeling the macroeconomic determinants of environmental degradation in E‐7 countries: The role of technological innovation and institutional quality

Abstract

Environmental degradation poses a severe threat to life on earth. Similarly to other countries, emerging seven (E‐7) countries have been struggling to decrease their dependence on non‐renewable energy sources by adopting environment friendly technologies for reducing environmental deterioration and to achieve sustainable development goals (SDGs) of the United Nations. In present study, we reassessed the technological policies of E‐7 countries, and addressed the issues of affordable and clean energy, institutional quality (IQU), and sustained economic growth (EGR) to address the problem of environmental deterioration. For this purpose, we have investigated the role of renewable energy consumption (REC), technological innovations (TINs), IQU, and EGR on CO2 emissions (CE) by using the panel quantile regression (PQR) for the period from 1996 to 2020. The empirical outcomes of FGLS reveal that a 1% increase in REC, TIN, and IQU reduces the CE by 0.145%, 0.233%, and 0.249%, while a 1% rise in EGR and population (POPU) raises the CE by 0.993% and 1.546% respectively. Similarly, the results of PQR demonstrate that REC, TIN, and IQU reduce CE, whereas EGR and POPU increase environmental degradation. The impact of TIN on CE is high at lower quantiles and low at higher quantiles. The impact of IQU on CE is low at lower quantiles and high at higher quantiles Based on these findings, we have recommended a comprehensive SDG‐oriented policy framework, so that E‐7 countries can make progress towards achieving the objectives of SDG 16, SDG 13, SDG 7, SDG 8, and SDG 9.