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Do natural resources and green technological innovation matter in addressing environmental degradation? Evidence from panel models robust to cross-sectional dependence and slope heterogeneity

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  • Ahakwa, Isaac
  • Xu, Yi
  • Tackie, Evelyn Agba
  • Odai, Leslie Afotey
  • Sarpong, Francis Atta
  • Korankye, Benard
  • Ofori, Elvis Kwame

Abstract

This study investigates the impact of natural resources and green technological innovation on environmental degradation via carbon dioxide emissions within the framework of environmental Kuznets curve (EKC) with renewable energy consumption and urbanization as control variables. Current econometric techniques are engaged for accuracy and reliability, and the study panel is revealed to be heterogeneous and cross-sectionally based, with yearly data from Asian countries from 1990 to 2019. The Augmented Mean Group (AMG) and Dynamic Common Correlated Effects Mean Group (DCCEMG) estimators are employed to examine the connection between the variables, and the findings affirm that increasing green technological innovation and renewable energy consumption mitigate environmental degradation, while urbanization exacerbates it. Natural resources are found to have both increasing and decreasing impacts on environmental degradation. The EKC hypothesis is validated in Asia, indicating that environmental degradation rises with economic expansion until it peaks, then declines, forming an inverted U-shaped curve. The study established bi-directional causalities between economic growth and environmental degradation, natural resources and environmental degradation, renewable energy consumption and environmental degradation, and urbanization and environmental degradation. Nevertheless, uni-directional causality from green technological innovation to environmental degradation is affirmed. Therefore, it is recommended that Asian countries prioritize policies that promote the development and implementation of green technologies, such as hybrid vehicles, energy-efficient building systems, and smart grids, among others, to enable sustainable energy consumption. This will reduce resource consumption, waste production, and pollution while achieving significant cost savings.

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  • Ahakwa, Isaac & Xu, Yi & Tackie, Evelyn Agba & Odai, Leslie Afotey & Sarpong, Francis Atta & Korankye, Benard & Ofori, Elvis Kwame, 2023. "Do natural resources and green technological innovation matter in addressing environmental degradation? Evidence from panel models robust to cross-sectional dependence and slope heterogeneity," Resources Policy, Elsevier, vol. 85(PB).
    • Handle: RePEc:eee:jrpoli:v:85:y:2023:i:pb:s0301420723006542
    DOI: 10.1016/j.resourpol.2023.103943
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