Toward achieving environmental sustainability target in Organization for Economic Cooperation and Development countries: The role of real income, research and development, and transport infrastructure

Abstract

AbstractThe transport sector due to growing population significantly contributes to greenhouse gases, and its share in carbon dioxide (CO2) emissions are increasing around the world. Therefore, this study investigates the linkage between research and development (R&D), transport, real income, and transport's CO2 in Organization for Economic Cooperation and Development (OECD) countries from 1990 to 2015. The study uses long‐run robust panel estimation methods such as mean group, fully modified ordinary least square, and DK standard regression that allow for heterogeneity and cross‐sectional dependence in the panel data analysis. The study finds that real income and population density contributes to CO2 emissions. Furthermore, transport infrastructure has an insignificant impact on CO2 emissions. However, R&D has a diminishing negative impact that lowers CO2 emissions. The control over the high population density and investment in R&D in clean energy production projects are necessary to combat the high rate of transport's CO2 emissions in OECD countries.