Green Growth, Technological Innovation and Carbon Emissions: Evidence From the G7 Economies

ABSTRACT

After the Paris Climate Agreement held in 2015, the G7 economies have worked towards ensuring that their economic growth is in line with their climate responsibilities. Each economy sets its own climate change action plans with the commitment to achieving them through domestic mitigation measures. The aim of this study is to empirically understand the long‐term associations of climate change adaptation technologies, climate change mitigation technologies and green growth on carbon dioxide emissions in G7 economies for the period 1990–2022. Employing a comprehensive methodology, encompassing Pesaran's cross‐sectional dependence and slope heterogeneity tests, Pedroni's cointegration tests, and the cross‐sectional auto regressive distributed lag (CS‐ARDL) model, the study discusses important dynamics influencing these emissions. The findings indicate that mitigation‐related technologies and green growth pave a way for reduction in emissions. Conversely, adaptation‐related technologies exert an upward pressure on emissions. The findings provide new empirical understanding on the varying effects of climate‐related technologies and green growth, highlighting the necessity for policy changes. The paper finally offers practical recommendations for G7 policymakers to improve the efficacy of climate plans by prioritizing the implementation of mitigation related technologies, achieving green growth, shift to renewable energy, and the promotion of sustainable trade practices.