Abstract
The 21st century economic growth is characterized by extensive production and consumption, which increases anthropogenic emissions. However, reducing emission levels require ecological sustainability through innovation and modern technological consideration. This paper investigated not only renewable energy-driven environmental quality but also captured innovation research investment in renewables within the framework of the environmental Kuznets curve (EKC) model for G-7 countries. The findings confirmed the presence of EKC hypothesis for G-7 countries. In addition, renewable energy and innovation were identified to exert negative effects on ecological footprint. To capture the entire conditional distribution of the ecological footprint, we applied the Method of Moments Quantile Regression with fixed-effects. The results affirmed the negative effects of renewable energy innovation. Besides, their effects were heterogeneous across the quantiles with evidence of diminishing effects from lower to higher quantiles, suggesting that countries with lower levels of ecological footprint are possibly more prone to the environmental deterioration effect of income growth. The results of the causality test support economic growth-induced ecological degradation, growth-induced renewables, and innovation-induced ecological conservation. The results further showed a feedback effect between renewables and ecological footprint, innovation, and income growth as well as innovation and renewables. These findings portend important implications for the realization of carbon-free economies in G-7 countries by 2100.
Highlights
There is a global consensus on the long-term effect of energy consumption, typically fossil fuels on anthropogenic greenhouse gases (GHGs) that hamper environmental quality (Al-Mulali et al, 2015; Charfeddine, 2017; Shujah-ur-Rahman et al, 2019; Asongu et al, 2019; Sarkodie and Strezov 2019; Paramati et al, 2020; Iorember et al, 2020; Usman et al, 2020a & b; Sadik-Zada and Loewenstein, 2020)
Where Φ0 is the constant term, lnEF is per capita ecological footprint transformed to its natural logarithm, and lnREI is Research, Design, and Development (RD&D) expenditure on renewable energy technologies transformed to natural logarithms. ε is the white noise characterized by stochastic and normal distribution assumptions with zero mean, while the cross-section dimension is represented by i (i 1⁄4 1, 2, ...,7) and year period t (t 1⁄4 1985, 1986, ..., 2016)
This study examines the different roles of economic growth, spending on renewable energy R&D, and renewables in mitigating the greenhouse effect in G-7 countries over the period 1985–2016
Summary
There is a global consensus on the long-term effect of energy consumption, typically fossil fuels on anthropogenic greenhouse gases (GHGs) that hamper environmental quality (Al-Mulali et al, 2015; Charfeddine, 2017; Shujah-ur-Rahman et al, 2019; Asongu et al, 2019; Sarkodie and Strezov 2019; Paramati et al, 2020; Iorember et al, 2020; Usman et al, 2020a & b; Sadik-Zada and Loewenstein, 2020). If policymakers understand in clear terms (supported by empirical results) how a unit of investment in renewable energy research and innovation contributes to reducing the ecological footprint and improving environmental quality, the better they are in making informed decisions that can reduce global warming and climate change. While previous empirical studies (Alola et al, 2019a; Alola et al, 2019b; Iorember et al, 2021; Ike et al, 2020a; Usman et al, 2020a & b; Bekun et al, 2019; Usman et al, 2020c; Musa et al, 2021) have investigated the extent to which renewable energy consumption aid in mitigating climate change by way of reducing CO2 emissions, others have evaluated the link between total energy research innovation and environmental quality (Balsalobre-Lorente et al, 2018).
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