Renewable energy R&D and natural resources: A success story of environmentally friendly financing in OECD economies

Abstract

Sustainable development is increasingly important in today's world as it combines social and economic progress with environmental protection, and few studies have examined renewable energy R&D and natural resources rent as important components of achieving a sustainable future. Therefore, this study addresses the gap in the literature by exploring the influence of renewable energy R&D, and natural resources rent on consumption-based carbon emissions for OECD economies from 1990 to 2020. The results obtained using the method of moment quantile regression indicate that renewable energy R&D plays a crucial role in mitigating carbon emissions, with its impact being more pronounced at higher quantiles. The results for natural resources rent show an adverse effect on environmental pollution at the 25th and 50th quantiles, whereas, at the 75th and 90th quantiles, the impact is positive but insignificant. The results for imports and economic growth have a significant positive influence on environmental pollution, while exports have a negative relationship with carbon emissions. Policymakers can decrease carbon emissions to improve environmental quality and enhance economic development in OECD economies by investing in renewable energy R&D and sustainable management of natural resource rent.