Who Benefits From Green Tech? How Eco‐Innovation and Process Eco‐Innovation Shape Emissions Inequality Across G7 Economies

This study examines the asymmetric effects of eco‐innovation on income‐based carbon emissions inequality within G7 economies over the period 1990–2023. Theoretically grounded in innovation diffusion theory and political economy frameworks, we argue that green technological advancements exert non‐linear, directional effects on emissions inequality due to differential adoption patterns across income groups, elite capture mechanisms, and path‐dependent lock‐in effects. Unlike prior research that conflates eco‐innovation types or focuses solely on aggregate emissions, we distinguish between comprehensive eco‐innovation (ECON) and process‐oriented eco‐innovation (ECOP), examining their separate positive and negative shocks on emissions inequality—measured as per capita CO2 emissions of the wealthiest 10% of the population. Employing the method of moments quantile regression (MMQR) with asymmetric specifications, we provide novel evidence that increases and decreases in eco‐innovation produce differential distributional impacts across the emissions inequality spectrum. Our findings reveal that while eco‐innovation expansion reduces emissions inequality in low‐inequality contexts, its benefits are asymmetrically concentrated among affluent groups in high‐inequality settings, with process eco‐innovation showing heterogeneous effects across quantiles and innovation directions. These results underscore the critical need for differentiated policy interventions that ensure green technological transitions promote both environmental sustainability and social equity, preventing the entrenchment of carbon privilege among wealthy populations.