Energy transition and environmental quality prospects in leading emerging economies: The role of environmental-related technological innovation

Abstract

The world has witnessed a significant rise in greenhouse gas emissions since the end of the 20th century as several economies begin to emerge into industrial hubs and manufacturing giants across the globe. Thus, in the wake of global interest in clean energy development and campaign for sustainable climate and ecosystem, the role of the emerging countries in the debate is unarguably vital and demanding. Importantly, this study seeks to examine the commitment of the leading emerging countries (E7) of Brazil, China, India, Indonesia, Mexico, Russia, and Turkey to energy transition and carbon-neutral 2050. We employ the cross-sectionally augmented autoregressive distributed lag approach that accounts for potential country-specific factors to examine the role of environmental-related technological innovations (ERT) in achieving climate neutrality in the E7 over the period from 1992 to 2018. Notably, the findings revealed that a 1 percent increase in ERT yields 0.33% (short-run) and 0.17% (long-run) reductions in carbon emission, thus suggesting that the E7 economies could be heading toward environmental sustainability with the application of ERT. Additionally, the result revealed that the application of ERT in the energy utilization profile significantly reduced the undesirable impact of primary energy utilization. However, the result showed that such an impact is not enough to trigger a transition to environmentally desirable cleaner energy that could mitigate carbon emissions. This is because the larger share of the E7 countries' primary energy utilization is from conventional and/or non-renewable energy sources. The environmental Kuznets curve hypothesis is also validated.