Do green technology innovations, financial development, and renewable energy use help to curb carbon emissions?

Clean technologies are a critical component of the Sustainable Development Goals (SDGs) set by the United Nations to combat global warming and limit global temperature increases to 1.5 degrees C.The role of green technology innovations, renewable energy, and financial development would be helpful for attaining the SDGs. In order to determine how these variables contribute to environmental protection, this study examines the effects of financial development, green technology innovations, and renewable energy use on carbon emissions (CE) for the twelve top emitters covering the data from 1991 to 2018. For this purpose, we applied second generation econometric techniques and the Dumitrescu and Hurlin (DH) causality test. The empirical results reveal that financial development increases CE, whereas green technology innovations and renewable energy use reduce CE. The results of the D-H causality test indicate bidirectional causality between financial development, green technology innovations, renewable energy use, and CE, as well as unidirectional causality from nonrenewable energy use, per capita income, and trade openness to CE. Moreover, the forecasting results suggest that green technology innovations and renewable energy use in the future will be the primary factors contributing to the decrease of CE, while consumption of nonrenewable energy will gradually diminish. Based on the findings, policies are suggested for reducing CE towards achieving sustainable development.(c) 2022 Elsevier Ltd. All rights reserved.

Automated summary

This study examines the effects of financial development, green technology innovations, and renewable energy use on carbon emissions. The results show that financial development increases carbon emissions, while green technology innovations and renewable energy use reduce carbon emissions. In the future, green technology innovations and renewable energy use will be the primary factors contributing to the decrease of carbon emissions.