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Exploring the heterogeneous effects of technological innovations on environmental sustainability: Do structural change, environmental policy, and biofuel energy matter for G7 economies?

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  • Liu Junsong
  • Ridwan Lanre Ibrahim
  • Abubakar Mohammed
  • Mamdouh Abdulaziz Saleh Al-Faryan

Abstract

The global economy has realized that global warming issues should not be treated with levity. Instead, conscientious and meticulous measures must be taken to address the unwavering ravaging impacts of ecological complications of which technological innovations stand out. Despite the emphasis on technology as a viable pathway to zero emissions by the recent 26 th Conference of the Parties (COP26), the feasibility of achieving the global target remains vogue from the empirical perspective. Hence, this study presents the first empirically based evidence on the heterogeneous effects of technological innovations on environmental sustainability in Group of Seven (G7) countries from 1995 to 2019. For robust policy insights, the study controls for the functional roles of structural change, environmental policy, biofuel energy, and trade openness in verifying the empirical model. The empirical evidence relies on second-generation estimators comprising cross-sectional autoregressive distributed lag (CS-ARDL), augmented mean group (AMG), common correlated effects mean group (CCEMG), and panel method of moment quantile regression (PMMQR) that are robust for the issues of slope heterogeneity and cross-sectional dependence. The main findings show that the various components of technological innovations, structural change, environmental policy, and biofuel energy support environmental sustainability by exerting statistically adverse effects on CO 2 emissions. In contrast, trade openness appears as a deterrent to sustainable environment by statistically and positively impacting CO 2 emissions. Besides, the findings reveal bidirectional and unidirectional causality pathways in the nexuses investigated for G7. Based on the empirical fallouts, viable policy insights that lead to achieving the net zero emissions target are formulated.

Suggested Citation

  • Liu Junsong & Ridwan Lanre Ibrahim & Abubakar Mohammed & Mamdouh Abdulaziz Saleh Al-Faryan, 2024. "Exploring the heterogeneous effects of technological innovations on environmental sustainability: Do structural change, environmental policy, and biofuel energy matter for G7 economies?," Energy & Environment, , vol. 35(4), pages 1818-1849, June.
    • Handle: RePEc:sae:engenv:v:35:y:2024:i:4:p:1818-1849
    DOI: 10.1177/0958305X221145922
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    References listed on IDEAS

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    1. Rodríguez-Caballero, Carlos Vladimir, 2022. "Energy consumption and GDP: a panel data analysis with multi-level cross-sectional dependence," Econometrics and Statistics, Elsevier, vol. 23(C), pages 128-146.

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