Unveiling CO 2 Emission Dynamics Under Innovation Drivers in the European Union

This study explores the complex relationship between innovation and carbon dioxide (CO 2 ) emissions across the primary, secondary, and tertiary sectors within the 27 European Union (EU) member states over the period 2017–2023. Drawing on a comprehensive dataset and grounded in theoretical frameworks, the research investigates how different innovation indicators—including broadband penetration, digital skills, public and business R&D expenditure, ICT training, and SME-driven innovations—affect sectoral CO 2 emissions. Using robust regression, the findings reveal a nuanced landscape: while ICT skills training, human resource mobility in science and technology, and SME business process innovations are associated with significant reductions in emissions, certain R&D investments and broadband penetration display positive correlations with emissions in specific service-oriented sectors. These results suggest that the environmental impacts of innovation are highly context-dependent and not uniformly positive. This study highlights the importance of strategically aligning innovation policies with sustainability objectives. Policymakers are encouraged to promote targeted digital training, support environmentally conscious R&D, and foster SME-led innovation practices. The results contribute to the growing discourse on sustainable innovation and provide actionable insights to advance the EU’s green transition.