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How energy transition and environmental innovation ensure environmental sustainability? Contextual evidence from Top-10 manufacturing countries

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  • Bashir, Muhammad Farhan
  • Pan, Yanchun
  • Shahbaz, Muhammad
  • Ghosh, Sudeshna

Abstract

Through the United Nations Climate Change Conferences, industrial economies have been urged to formulate stringent environmental regulations. This study adds to the current deliberations by exploring the role of energy transition and environmental innovation on ecological footprint for the top ten manufacturing countries. The time period of analysis runs from 1995 to 2019. We have added other energy and macro variables to reduce the omitted variable bias. The panel estimation methods confirm significant association across the concerned variables. Our findings from CS-ARDL, AMG, CCEMG, and FMOLS confirm that environmental innovation, renewable energy and energy transition have a significant negative association on ecological footprint. On contrary, financial development, economic growth and urbanization lead to environmental deterioration. Given the findings we propose some policy suggestions. In particular governments should foster technological and structural changes that are necessary for energy transition to enhance long-run economic efficiency. Further the manufacturing economies should encourage renewable energy consumption to reduce the burden on ecological footprint. To this end the countries can foster development of solar industry and upgradation of infrastructure in the context of other renewables.

Suggested Citation

  • Bashir, Muhammad Farhan & Pan, Yanchun & Shahbaz, Muhammad & Ghosh, Sudeshna, 2023. "How energy transition and environmental innovation ensure environmental sustainability? Contextual evidence from Top-10 manufacturing countries," Renewable Energy, Elsevier, vol. 204(C), pages 697-709.
    • Handle: RePEc:eee:renene:v:204:y:2023:i:c:p:697-709
    DOI: 10.1016/j.renene.2023.01.049
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