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Does technological innovation limit trade-adjusted carbon emissions?

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Abstract

The objective of this analysis is to examine the impact of international trade and technological innovation over the 1990–2018 period on the G7 economy’s consumption-based carbon emissions. The report explores international trade by separately considering imports and exports. The results indicate that the data cross-sections are dependent and that the panel has slope heterogeneity. The results of the co-integration study indicate that imports, exports of technological innovation, GDP, and demand-related carbon emissions are co-integrated with systemic splits (2001 mild recession, 2008 financial crises, and 2011 decline of stock market, and 2014 export decline). The cross sectionally augmented autoregressive distributive lag model results show that technological innovation and exports have a negative effect on the use of carbon. Meanwhile, imports and GDP are positive associated with carbon emissions based on consumption. The analysis of the robustness test also verifies these impacts. The results of this research study show that policymakers and regulators can encourage technological innovation to reduce carbon pollution and improve the sustainability of the environment.

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Notes

  1. In the last 5 years US main imports were machinery and transportation with 30% and 16%, UK’s machinery 21% and transportation products. About 16% Japan’s imports are 25% machinery and 23% minerals, Germany imports are 25% machinery and 14% transportation products, France imports are dominated by 22% machinery and 15% transportation products, for Canada their major imports are 24% machinery and 20% transportation products, and Italy imports are dominated by machinery 18% and 12% chemical products. These figures suggest that these countries main imports are machinery and transportation products.

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Availability of data and materials

Data for consumption-based carbon emissions are taken from Global Carbon Atlas (GCA), while other variable data is taken from World Bank which is freely available on Mentioned sites.

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  1. School of Economics, Qingdao University, Shandong Province, China

    Salman Wahab

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I am the only author in this article and I have done the whole work of the article: conceptualization, writing, collecting data, methodology, revision, and proofreading,

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Wahab, S. Does technological innovation limit trade-adjusted carbon emissions?. Environ Sci Pollut Res 28, 38043–38053 (2021). https://doi.org/10.1007/s11356-021-13345-3

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