Green innovation and carbon emissions: the role of carbon pricing and environmental policies in attaining sustainable development targets of carbon mitigation—evidence from Central-Eastern Europe

Sustainable Development Goals (SDGs) are enforced by a set of instruments, among which environmental regulations, green innovation, and carbon taxes play a central part. This article aims to investigate the mitigation capacity of the above-mentioned elements using a sample of 15 European countries....

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Bibliographic Details
Published in:Environment, development and sustainability development and sustainability, 2023-08, Vol.25 (8), p.8777-8798
Main Authors: Khurshid, Adnan, Rauf, Abdur, Qayyum, Sadia, Calin, Adrian Cantemir, Duan, WenQi
Format: Article
Language:English
Subjects:
Bidirectionality
Carbon
Carbon dioxide
Causality
Earth and Environmental Science
Ecology
Economic Geology
Economic Growth
Emission standards
Emissions
Emissions control
Environment
Environmental Economics
Environmental Management
Environmental policy
Environmental regulations
Environmental tax
Error correction
Greenhouse gases
Innovations
Mitigation
Policies
Pricing
Regulation
Sustainability
Sustainable Development
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Summary:Sustainable Development Goals (SDGs) are enforced by a set of instruments, among which environmental regulations, green innovation, and carbon taxes play a central part. This article aims to investigate the mitigation capacity of the above-mentioned elements using a sample of 15 European countries. This study takes CO 2 and greenhouse gas emissions (GHG) into account to ensure the consistency and accuracy of the findings. Augmented Dickey–Fuller and CIPS unit root tests, Pesaran CD, Bias-corrected scaled LM are employed to check the cross-sectional dependence. The panel effect is tested using error correction-based modeling along with dynamic approaches, while the Granger causality technique employs country-related outcomes. The results show that innovation and environmental policies help in reducing emissions both in the long and the short run. In addition to this, carbon pricing mitigates emissions in the regions although its effect is more country-specific. We find evidence of both unidirectional and bidirectional causality among the variables. However, in a few cases, they are too a country-specific artifact. As a general conclusion, carbon pricing is an efficient short-run tool to achieve SDGs. At the same time, long-run sustainability relies on green innovation and environmental policy stringency in the region.
ISSN:1387-585X
1573-2975
DOI:10.1007/s10668-022-02422-3