Nexus between environmental innovation, energy efficiency and environmental sustainability in the lower-income economy

Abstract

Every major event on a national or global scale influences the environment, and scientists are always looking for new solutions to decrease ecological destruction. Throughout the preceding decade, professionals offered and executed policy ideas for energy adaptation and integration, such as the use of renewable energy. Between 1980 and 2021, the study looks at the relationship between environmental innovation, energy efficiency, and institutional quality in low-income nations. Autoregressive distributed lag (ARDL), cross-sectional ARDL, and Dumitrescu-hurling models were used to investigate the empirical connection. Following the identification of the initial difference, the stationary variables were combined due to commonalities in their dynamics. The panel counteraction test revealed that long-term relationships between variables exist. Including renewable energy sources and environmental innovation improves the long-term sustainability of low-income economies. The ARLD and CS-ARDL variable coefficients have a greater effect on environmental policy when their institutions are strong, ecologically aware, and resourceful. A well-established feedback loop connects renewable energy with environmental sustainability. Institutional excellence and environmental sustainability are inextricably linked. According to the report, governments and policymakers should increase the usage of renewable energy sources and invest in environmental innovation to attain environmental sustainability.