Investigation the Impact of Technological Innovation on Environmental Degradation: A Case Study of Developed Countries

Abstract

Global warming is a hot and debatable issue among policymakers and researchers. Though several studies have explored the factors of environmental pollution by applying conventional and mean based estimation techniques, as well as the results of previous studies are mixed and inconclusive which demand further research on this issue. This research uses data from the Group of Seven (G-7) countries for the years 1996–2020 to examine the diverse effects of population, economic growth, technological advancements, and the use of renewable energy on CO₂ emissions. It applies several panel-sensitive and basic tests for analyzing the characteristics of the dataset. According to the results of the unit root tests, some variables are at first difference, while others are at level. We used the Johansen Fisher, and Kao cointegration tests; the findings of these tests confirm that all of the study's variables have a long-term relationship. Additionally, panel quantile regression is used, and the Jarque-Bera test's p-values are less than 0.05, rejecting the assumption of data normality. Because, in the case of data non-normality, the use of a linear regression model may provide mixed and inconclusive outcomes. Panel quantile regression results demonstrate that while population growth and economic expansion enhance environmental deterioration, technical innovation, and the use of renewable energy sources minimize environmental pollution. Based on the empirical findings, this study suggests policy implications for improving the environmental quality by reducing environmental degradation.

Keywords

Technological innovation, environmental degradation, economic growth