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Achieving Carbon Neutrality Pledge through Clean Energy Transition: Linking the Role of Green Innovation and Environmental Policy in E7 Countries

Author

Listed:
  • Yang Yu

    (School of Economics, Hainan University, Haikou 570228, China
    Institute of Open Economy, Haikou 570228, China)

  • Magdalena Radulescu

    (Department of Finance, Accounting, and Economics, University of Pitesti, 110040 Pitesti, Romania
    Institute for Doctoral and Post-Doctoral Studies, University “LucianBlaga” Sibiu, Bd. Victoriei, No.10, 550024 Sibiu, Romania)

  • Abanum Innocent Ifelunini

    (Department of Economics, University of Nigeria, Nsukka 410001, Nigeria
    Resource & Environmental Policy Research Centre-EfD Nigeria, University of Nigeria, Nsukka 410001, Nigeria)

  • Stephen Obinozie Ogwu

    (Department of Economics, University of Nigeria, Nsukka 410001, Nigeria
    Department of Economics, Kingsley Ozumba Mbadiwe University, Ideato 475102, Nigeria)

  • Joshua Chukwuma Onwe

    (Department of Economics, University of Nigeria, Nsukka 410001, Nigeria
    School of Financial and Business Management Studies, Federal Polytechnic Ohodo 01801, Enugu State, Nigeria)

  • Atif Jahanger

    (School of Economics, Hainan University, Haikou 570228, China
    Institute of Open Economy, Haikou 570228, China)

Abstract

Most countries, notably those that signed the Paris Climate Agreement, prioritize achieving the zero carbon or carbon neutrality aim. Unlike earlier studies, this one assesses the contribution of environmental policy, clean energy, green innovation, and renewable energy to the E7 economies’ achievement of carbon neutrality goals from 1990 to 2019. Findings emanating from the study show that the EKC hypothesis is valid in E7 countries. Implying that emissions in the E7 countries increased with the kick-off of development but declined later due to possible potent environmental regulatory policies put in place. Similarly, across all models, renewable energy (REN), green innovations (GINNO), environmental tax (ETAX), and technological innovations (TECH) were found to exert a negative and significant impact on carbon emissions in the E7 countries both in the short and long run. On the other hand, economic expansion (GDP) positively impacts environmental deterioration. Furthermore, the country-specific result shows that, on average, Brazil, India, China, Russia, Mexico, and Indonesia have significant environmental policies aiding carbon abatement. Except for Brazil, Mexico, and Indonesia, the income growth in the rest of the countries does not follow the EKC proposition. Furthermore, the causality result revealed a unidirectional causal relationship between GDP, REN, and GINNO to CO 2 emission. No causality was found between ETAX with CO 2 , while a bi-directional causality exists between technology and CO 2 emissions. Based on the finding, policymakers in the E7 countries should move away from fossil fuels because future electricity output will not be sufficient to reduce emissions considerably. Environmental regulations, encouraging technological innovation, adopting green and sustainable technology, and clean energy sources, among other things, demand radical and broad changes.

Suggested Citation

  • Yang Yu & Magdalena Radulescu & Abanum Innocent Ifelunini & Stephen Obinozie Ogwu & Joshua Chukwuma Onwe & Atif Jahanger, 2022. "Achieving Carbon Neutrality Pledge through Clean Energy Transition: Linking the Role of Green Innovation and Environmental Policy in E7 Countries," Energies, MDPI, vol. 15(17), pages 1-23, September.
  • Handle: RePEc:gam:jeners:v:15:y:2022:i:17:p:6456-:d:906309
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    2. Alastaire Sena Alinsato & Kora Hafiz Bete & Nassibou Bassongui, 2023. "A climate–economy model in a stochastic differential equilibrium with fractional Brownian motions and Poisson jumps," SN Business & Economics, Springer, vol. 3(8), pages 1-23, August.
    3. Nian Wang & Yingming Zhu, 2022. "The Integration of Traditional Transportation Infrastructure and Informatization Development: How Does It Affect Carbon Emissions?," Energies, MDPI, vol. 15(20), pages 1-23, October.
    4. Xinping Li & Qiongxia Qin & Yongliang Yang, 2023. "The Impact of Green Innovation on Carbon Emissions: Evidence from the Construction Sector in China," Energies, MDPI, vol. 16(11), pages 1-23, June.
    5. Nuno Carlos Leitão & Matheus Koengkan & José Alberto Fuinhas, 2022. "The Role of Intra-Industry Trade, Foreign Direct Investment, and Renewable Energy on Portuguese Carbon Dioxide Emissions," Sustainability, MDPI, vol. 14(22), pages 1-21, November.
    6. Atif Jahanger & Daniel Balsalobre-Lorente & Ahmed Samour & Foday Joof & Mumtaz Ali & Turgut Tursoy, 2022. "Do Renewable Energy and the Real Estate Market Promote Environmental Quality in South Africa: Evidence from the Bootstrap ARDL Approach," Sustainability, MDPI, vol. 14(24), pages 1-17, December.

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    Keywords

    CO 2 emissions; green technology; zero carbon; EKC; clean energy; E7 nations;
    All these keywords.

    JEL classification:

    • E7 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics

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