Advancing G20 Carbon Neutrality: Unpacking the Green Energy Supply-Ecological Degradation Nexus Under Green Innovations

Authors

  • Kaveh Kaviani * Department of Financial Management, Karaj Branch, Islamic Azad University, Karaj, Iran.
  • Ricardo Marcão NECE-UBI, Universidade da Beira Interior, Covilhã, Portugal. ISLA Santarém - Polytechnic University, Santarém, 2000-24, Portugal. https://orcid.org/0000-0003-3277-3078
  • Morteza Kaviani Department of Accounting, Shafagh Institute of Higher Education, Tonekabon, Iran.

https://doi.org/10.48313/iee.vi.52

Abstract

This study investigates the determinants of environmental degradation in G20 countries, which account for a substantial share of global economic activity, energy consumption, and ecological pressure. Given their central role in both contributing to and potentially mitigating environmental challenges, examining sustainability drivers within this group is critically important. The study analyzes panel data for G20 economies over the period 2010-2024, employing the Quantile Generalized Method of Moments (Q-GMM) approach to capture heterogeneous effects across different levels of ecological footprint. The empirical results reveal that green growth, green trade, green energy supply, and green technology innovation all exert significant negative effects on ecological footprint, indicating their effectiveness in reducing environmental degradation. Among these, green trade and technological innovation demonstrate particularly strong impacts. Furthermore, the findings show that green technology innovation plays a crucial moderating role by strengthening the environmental benefits of green growth, trade, and energy transition. These results highlight the importance of integrating economic, technological, and environmental strategies. From a policy perspective, the study suggests that G20 countries should adopt a coordinated approach that simultaneously promotes green growth, expands green trade, accelerates renewable energy adoption, and strengthens innovation systems to achieve long-term environmental sustainability.

Keywords:

Ecological degradation, Green energy supply, Green innovations, Green trade, Green growth

References

  1. [1] Fakher, H. A. (2021). The role of environmental sustainability, foreign direct investment and trade openness in economic growth: with emphasis on the causal linkage. Big data and computing visions, 1(2), 57–70. https://doi.org/10.22105/bdcv.2021.142227
  2. [2] Usman, M., Jahanger, A., Makhdum, M. S. A., Radulescu, M., Balsalobre-Lorente, D., & Jianu, E. (2022). An empirical investigation of ecological footprint using nuclear energy, industrialization, fossil fuels and foreign direct investment. Energies, 15(17), 6442. https://www.mdpi.com/1996-1073/15/17/6442
  3. [3] Li, R., Wang, X., & Wang, Q. (2022). Does renewable energy reduce ecological footprint at the expense of economic growth? An empirical analysis of 120 countries. Journal of cleaner production, 346, 131207. https://doi.org/10.1016/j.jclepro.2022.131207
  4. [4] Fakher, H. A., Panahi, M., Emami, K., Peykarjou, K., Zeraatkish, S. Y., & others. (2021). New insight into development of environmental-economic model based on a composite environmental quality index: An application of principal components analysis. Journal of decisions and operations research, 6(2), 183–209. https://doi.org/10.22097/eeer.2021.280746.1192
  5. [5] Khan, Z., Ali, S., Umar, M., Kirikkaleli, D., & Jiao, Z. (2020). Consumption-based carbon emissions and international trade in G7 countries: The role of environmental innovation and renewable energy. Science of the total environment, 730, 138945. https://doi.org/10.1016/j.scitotenv.2020.138945
  6. [6] Fakher, H. A. (2020). Analytical insights on the relationship between economic growth and environmental degradation in framework of EKC hypothesis and various environmental indicators. Innovation management and operational strategies, 1(3), 252–268. https://doi.org/10.22105/imos.2021.272348.1032
  7. [7] Alola, A. A., Bekun, F. V., & Sarkodie, S. A. (2019). Dynamic impact of trade policy, economic growth, fertility rate, renewable and non-renewable energy consumption on ecological footprint in Europe. Science of the total environment, 685, 702–709. https://doi.org/10.1016/j.scitotenv.2019.05.139
  8. [8] Wang, M., Hossain, M. R., Mohammed, K. S., Cifuentes-Faura, J., & Cai, X. (2023). Heterogenous effects of circular economy, green energy and globalization on CO2 emissions: policy based analysis for sustainable development. Renewable energy, 211, 789–801. https://doi.org/10.1016/j.renene.2023.05.033
  9. [9] Sharma, R., Sinha, A., & Kautish, P. (2021). Does renewable energy consumption reduce ecological footprint? Evidence from eight developing countries of Asia. Journal of cleaner production, 285, 124867. https://doi.org/10.1016/j.jclepro.2020.124867
  10. [10] Ahmed, Z., Ahmad, M., Murshed, M., Shah, M. I., Mahmood, H., & Abbas, S. (2022). How do green energy technology investments, technological innovation, and trade globalization enhance green energy supply and stimulate environmental sustainability in the G7 countries? Gondwana research, 112, 105–115. https://doi.org/10.1016/j.gr.2022.09.014
  11. [11] Koseoglu, A., Yucel, A. G., & Ulucak, R. (2022). Green innovation and ecological footprint relationship for a sustainable development: Evidence from top 20 green innovator countries. Sustainable development, 30(5), 976–988. https://doi.org/10.1002/sd.2294
  12. [12] Lin, B., & Ullah, S. (2024). Effectiveness of energy depletion, green growth, and technological cooperation grants on CO2 emissions in Pakistan’s perspective. Science of the total environment, 906, 167536. https://doi.org/10.1016/j.scitotenv.2023.167536
  13. [13] Saleem, H., Khan, M. B., & Mahdavian, S. M. (2022). The role of green growth, green financing, and eco-friendly technology in achieving environmental quality: Evidence from selected Asian economies. Environmental science and pollution research, 29(38), 57720–57739. https://doi.org/10.1007/s11356-022-19799-3
  14. [14] Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The review of economic studies, 58(2), 277–297. https://doi.org/10.2307/2297968
  15. [15] Blundell, R., & Bond, S. (2000). GMM estimation with persistent panel data: an application to production functions. Econometric reviews, 19(3), 321–340. https://doi.org/10.1080/07474930008800475
  16. [16] Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of econometrics, 87(1), 115–143. https://doi.org/10.1016/S0304-4076(98)00009-8
  17. [17] Koenker, R., & Bassett Jr, G. (1978). Regression quantiles. Econometrica: journal of the econometric society, 33–50. https://doi.org/10.2307/1913643
  18. [18] Machado, J. A. F., & Silva, J. M. C. S. (2019). Quantiles via moments. Journal of econometrics, 213(1), 145–173. https://doi.org/10.1016/j.jeconom.2019.04.009
  19. [19] Westerlund, J. (2008). Panel cointegration tests of the Fisher effect. Journal of applied econometrics, 23(2), 193–233. https://doi.org/10.1002/jae.967

Downloads

Published

2025-12-15

Issue

Vol. 1 No. 4 (2025): Innovations in Environmental Economics

Section

Articles

How to Cite

Advancing G20 Carbon Neutrality: Unpacking the Green Energy Supply-Ecological Degradation Nexus Under Green Innovations. (2025). Innovations in Environmental Economics , 1(4), 295-309. https://doi.org/10.48313/iee.vi.52

Similar Articles

1-10 of 24

You may also start an advanced similarity search for this article.