4.7 Article

Carbon neutrality target for G7 economies: Examining the role of environmental policy, green innovation and composite risk index

Journal

JOURNAL OF ENVIRONMENTAL MANAGEMENT
Volume 295, Issue -, Pages -

Publisher

ACADEMIC PRESS LTD- ELSEVIER SCIENCE LTD
DOI: 10.1016/j.jenvman.2021.113119

Keywords

Carbon neutrality; Environmental policy; Green innovation; Composite risk index

Funding

  1. China Post-Doctoral Science Foundation [2021M693860]

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This study highlights the importance of environmental policy, green innovation, composite risk index, and renewable energy research and development in controlling carbon emissions and achieving carbon neutrality targets. The results show a positive impact of these factors, while income has been found to influence environmental degradation. Additionally, the study identifies bidirectional causality within environmental policy, composite risk index, green innovation, and CO2 emissions, with unidirectional causality from GDP and renewable energy R&D to CO2 emissions.
To achieve zero carbon or achieving carbon neutrality target is of great importance to many countries around the globe especially post Paris climate agreement. This study, unlike previous studies, evaluates the role of environmental policy, green innovation, composite risk index, and renewable energy R&D in achieving carbon neutrality targets for G7 economies from 1990 to 2019. The results confirmed the validity of the EKC hypothesis for G7 economies. Further, the result shows that environmental policy, green innovation, composite risk index, and renewable energy R&D help control carbon emissions. In contrast, income reveals a positive influence on environmental degradation. Furthermore, bidirectional causality has been reported in environmental policy, composite risk index, green innovation, and the CO2 emissions, while unidirectional causality running from GDP and renewable energy R&D to CO2 emissions. Based on the empirical findings, it is suggested that environmental policies should be strengthened, promote green innovation and renewable energy research and development expenditures, and political stability and institutional quality must be stabilized to lowers sectoral risks that would help a sustainable environment.

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