The impact of green innovation and renewable energy on CO2 emissions in G7 nations

Abstract

This study aims to explore the effect of eco-innovation and renewable energy on carbon dioxide emissions (CDE) for G7 countries. Using regression models, the results reveal that eco-innovation and renewable energy lead to reducing CDE in the presence of governance variables. Additional analysis is conducted to examine whether Hofstede national culture dimensions moderate the nexus of "eco-innovation- carbon emission" and "renewable energy-carbon emission". The results show that individualism, long-term orientation, and indulgence dimensions moderate positively the eco-innovation-carbon emission relationship. Moreover, power distance and uncertainty avoidance dimensions moderate the relationship between renewable energy and CDE and help reduce carbon emissions. The outcomes of this study provide new insights and directives for policymakers and regulators. In fact, increased investment in eco-innovation and renewable energy will support the environmental agenda of G7 countries. National cultural dimensions should be taken into consideration to improve awareness of environmental quality. Moreover, the combination of governance indicators plays a key role in environmental sustainability.