The interrelationships between carbon dioxide emissions and innovation: international evidence

Abstract

ABSTRACTThe key concernment for countries in achieving sustainable development goals is reducing emissions. Most studies focused on investigating the role of technological innovation in reducing emissions. The reaction of innovation needs to be considered when increasing emissions. The objective of this research is to examine the interrelationship between technological innovation and carbon emissions for 71 nations in the world from 1996 to 2020, applying simultaneous equation modelling (SEM) with three-stage least squares (3SLS). Outcomes demonstrate a bidirectional relationship between innovation and carbon emissions. Specifically, innovation influences emissions negatively, while carbon emissions influence innovation positively. Renewable energy and forest areas negatively influence emissions, while tourism and agriculture positively influence emissions. Trade and human capital positively impact innovation. Institutional quality enhances environmental quality, while it negatively influences innovation. Several policies promote innovation and reduce emissions towards sustainable development goals.

Keywords

• Technology innovation
• CO2 emissions
• SEM
• 3SLS
• institutional quality