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Estimating environmental Kuznets Curve in the presence of eco-innovation and solar energy: An analysis of G-7 economies

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  • Zhao, Wei
  • Liu, Yishu
  • Huang, Lihua

Abstract

The current study aims to examine the relationships between solar energy, eco-innovations and carbon emissions in the context of the Environmental Kuznets Curve in group of seven countries over the period from 1995 to 2018. According to the EKC theory, urbanization and industrialization deplete natural resources and produce industrial and urban wastes at early phases of economic growth. For empirical analysis, second-generation panel estimation techniques, i.e., tests for unit root cointegration techniques and Cross-Sectional Augmented Distributed Lag Model for short-run, and long-run coefficient estimations have been employed. The estimated findings are reconfirmed by applying Augmented Mean Group and Common Correlated Effect Mean Group methods. Results reveal that solar energy and eco-innovation exert a significant and negative long-run effect on carbon dioxide emission. Our findings showing cross sectional dependence and heterogeneity in the panel data, suggest that group of seven countries must devise strategies to invest in environmentally friendly technologies, take measures to encourage consumers and businesses to adopt environmentally friendly innovations and to subsidize the use of solar energy to cope with the environmental problems. The article provides the guidelines to the regulators while developing policies regarding environmental degradation.

Suggested Citation

  • Zhao, Wei & Liu, Yishu & Huang, Lihua, 2022. "Estimating environmental Kuznets Curve in the presence of eco-innovation and solar energy: An analysis of G-7 economies," Renewable Energy, Elsevier, vol. 189(C), pages 304-314.
    • Handle: RePEc:eee:renene:v:189:y:2022:i:c:p:304-314
    DOI: 10.1016/j.renene.2022.02.120
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    2. Chen, Huihui & Rehman, Mubeen Abdur & Luo, Jia & Ali, Madad, 2022. "Dynamic influence of natural resources, financial integration and eco-innovation on ecological sustainability in EKC framework: Fresh insights from China," Resources Policy, Elsevier, vol. 79(C).
    3. Ma, Qiang & Li, Sa & Aslam, Misbah & Ali, Naveed & Alamri, Ahmad Mohammed, 2023. "Extraction of natural resources and sustainable renewable energy: COP26 target in the context of financial inclusion," Resources Policy, Elsevier, vol. 82(C).
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    7. Sobia Hanif & Muhammad Atif Nawaz & Snober Fazal & Ruqayya Ibraheem, 2022. "Role of Natural Resources and Eco-Innovations in Determination of the Environmental Quality of Pakistan: Evidence through Vector Autoregressive (VAR) Estimation," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(1), pages 127-140, March.

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