Research and development for a carbon-neutral future and the status of EKC in G7 economies: evidence from CSARDL approach.

Abstract

Climate change issues present substantial obstacles to the global community's stability and humanity's overall welfare. Reducing carbon emissions is crucial in attaining environmental sustainability and addressing the consequences of SDG 13 (climate actions). The G7 nations, representing some of the largest economies globally and significantly contributing to global carbon emissions, have achieved certain advancements in mitigating their carbon footprint. Nevertheless, the attainment of carbon neutrality continues to pose a substantial obstacle. This study examines the mechanisms leading to environmental sustainability in G7 economies, explicitly emphasizing the contribution of research and development (R&D) toward attaining carbon neutrality. The present study utilizes G7 data from 1990 to 2020 to conduct an empirical analysis employing a cross-sectional autoregressive distributed lag (CSARDL) panel model. The primary objective of this investigation is to examine the influence of R&D expenditure (R&DE) on carbon emissions metric ton (CO2Mt). Furthermore, this study investigates the current state of the EKC in the economies of the G7 nations, as well as the influence of renewable energy (RE) and non-renewable energy (NRE) on CO2Mt. The results suggest that R&DE is critical in mitigating CO2Mt and attaining carbon neutrality. The study also validates the EKC implies a negative and non-linear relationship between growth and CO2Mt. Moreover, renewable and non-renewable energy validate their respective negative and positive effects on CO2Mt. The findings of our study offer valuable insights for policymakers in the G7 nations, aiding them in developing effective regulatory measures for achieving carbon neutrality goals.