Green Governance and Energy Transition: A Quantile-on-Quantile Analysis of Renewable Energy, Policy, and Innovation Effects on Carbon Emissions

In this analysis, the dynamic nexus between green governance, energy transition, and carbon emissions in the period spanning 1990 and 2022 for the twenty-one member economies of the Organization for Economic Cooperation and Development (OECD) and partner economies is examined. Employing Feasible Generalized Least Squares (FGLS), Driscoll–Kraay Standard Errors (DKSE), and Quantile-on-Quantile Regression (QQR), this analysis encompasses the effects of the use of renewable energy sources, economic growth, and changes in the population on carbon emissions. Results for the analysis show that the adoption of renewable energy sources, tough environmental regulations, and green innovation play a significant role in offsetting carbon emissions since the results are more pronounced at the tail ends of the distribution of carbon emissions. Conversely, changes in the level of population and economic growth are identified as potential exacerbators of environmental concerns. In offering implications for policymakers, this analysis argues that environmental laws and taxation and green innovation are potential means of improving environmental governance in achieving the United Nations’ Sustainable Development Goals and climate change commitments. By addressing the issue of differential environmental effects based on varying levels of carbon emissions, this analysis makes contributions to the expanding literature on sustainable environmental governance in the twenty-first-century energy economy.