Asymmetric linkages between renewable energy, technological innovation, and carbon-dioxide emission in developed economies: non-linear ARDL analysis

Although economic development has been strong in the world's 18 most developed economies, carbon-dioxide emission (COE) has been steadily declining in recent decades. As a result, the purpose of this research is to investigate the role of variables that contribute to the reduction of COE in these economies by using a dataset 1990 to 2019. GDP, GDP(2), renewable energy use (REC), and technical innovation (INNO) have been selected as the independent variables for this study. A strategy based on asymmetric ARDL (NARDL) technique is utilized in conjunction with a pooled mean group (PMG) estimation technique to investigate the asymmetrical relationships between COE and the exogenous variables under consideration. For the purpose of determining the direction of causality, the Granger non-causality test is utilized. Furthermore, a unidirectional causality is discovered between GDP and CO2 emissions as well as between GDP and technological innovation. An environmental Kuznets curve hypothesis has been confirmed to exist, and renewable energy has been identified as a significant variable in reducing COE. The study also confirmed that COE is reduced by positive technological innovation shocks and increased by negative shocks. As a result of the findings, the study did a causality test and came up with policy recommendations.

Automated summary

This research investigates the variables contributing to the reduction of CO2 emissions in the world's 18 most developed economies. The study finds that GDP, renewable energy use, and technological innovation play significant roles in reducing carbon dioxide emissions.