Journal
TECHNOLOGICAL FORECASTING AND SOCIAL CHANGE
Volume 191, Issue -, Pages -Publisher
ELSEVIER SCIENCE INC
DOI: 10.1016/j.techfore.2023.122477
Keywords
Green trade; Green innovation; Consumption -based carbon emissions; G-7 economies; COP26
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Pursuing Green Trade, which involves environmental restrictions, has been a popular policy choice for wealthy and trade-integrated countries. However, the effectiveness of such regulations in improving environmental quality has been a less investigated area. In this study, using a rigorous econometric approach, we analyze the environmental effects of two competing policy choices, namely imposing environmental restrictions on Trade or investing in green technology and innovation for G-7 countries. Our findings are exciting and contrary to mainstream ideas. We find that increasing the share of Green trade in G-7 countries' overall trade portfolio has no environmental benefits and actually leads to increased consumption-based carbon emissions. On the other hand, investing in Green technology has a significant positive impact in reducing these emissions in the panel of G-7 countries. These results underline the importance of the two competing policy choices that every country must consider to protect the climate and prevent further environmental degradation.
Making a country's Trade environmentally friendly, aka the Green Trade through environmental restrictions, has long been a popular policy choice, especially for the wealthy and trade-integrated economies. However, the effectiveness of such regulations in terms of improved environmental quality is an essential but less investigated research question. In this paper, we analyze, for G-7 countries, the environmental effects of the two competing policy choices, i.e., imposing environmental restrictions on Trade or investing in green technology and inno-vation, by following a rigorous econometric approach. Our results are exciting and, to some extent, contrary to mainstream ideas. We find that the increasing share of Green trade in the overall trade portfolio of G-7 countries is futile and more damaging for the environment by causing an increase in consumption-based carbon emissions. On the other hand, the role of Green technology is highly effective in reducing these emissions in the panel of G-7 countries. These results highlight the effectiveness of the two competing policy choices almost every country must make to protect the climate and stop further environmental degradation.
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