Do international collaborations in environmental-related technology development in the U.S. pay off in combating carbon dioxide emissions? Role of domestic environmental innovation, renewable energy consumption, and trade openness
2022
Many economies are seeking new ways to improve environmental quality through international collaboration in environmental-related technology development (ICERTD). Cost reduction, green market penetration, and green technology development are central to global partnerships for sustainable development, even though no empirical study explains the ICERTD-carbon dioxide (CO₂) emissions nexus. The paper fills this knowledge gap in the environmental economics literature by examining the relationship between ICERTD and CO₂ emissions in the U.S. from 1990Q1 to 2018Q4 using domestic environmental innovation, trade openness, renewable energy consumption, and gross domestic product per capita as control variables. Fully modified ordinary least squares, dynamic ordinary least squares, and correlated component regression methods were employed for testing the long-run nexus among the variables. The present study revealed that (i) a long-run cointegration existed among ICERTD, domestic environmental innovation, trade openness, renewable energy consumption, gross domestic product per capita, and CO₂ emissions; (ii) ICERTD, domestic environmental innovation, and renewable energy consumption benefited the U.S. in lowering CO₂ emissions in the long run; and (iii) trade openness and gross domestic product per capita were positively associated with CO₂ emissions. This study recommends important policy recommendations for increasing ICERTD for decarbonization.
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