Technological progress and carbon emissions: Evidence from the European Union
36 Pages Posted: 12 Dec 2024
Date Written: October 20, 2024
Abstract
This graphical abstract shows the U-shaped effect of technological progress on CO2 emissions. Digital trade, high-tech trade, and R&D investment serve as proxies for Technological progress, with Technological progress 2 representing its squared term. CO2 emissions per purchasing power parity dollar of GDP, CO2 emissions in kilotons, CO2 emissions in metric tons per capita, and total greenhouse gas emissions are used as proxies for CO2 emission. Institutional quality, measured by the rule of law, is included as the moderating variable. The control variables include population, GDP per capita (GDP per capita), mobile subscriptions (Mobile), FDI inflow (FDI), and unemployment (Unemploy). Highlights •We examine the effects of technological progress on CO2 emissions in the European Union. •When digital and high-tech trade is low (high), CO2 emissions decrease (increase) with trade 2 volume. •When R&D investment is low (high), CO2 emissions decrease (increase) with R&D investment. •Institutional quality mitigates the negative effects of technological progress on CO2 emissions.
Keywords: CO2 emissions, European Union, financial market, institutional quality, technological progress JEL Classification: B27 (International Trade and Finance), F14 (Empirical Studies of Trade), F18 (Trade and Environment), F41 (Open Economy Macroeconomics), G15 (International Financial Markets), G18 (Government Policy and Regulation), P18 (Energy Environment), and R58 (Regional Development Planning and Policy)
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