Dynamic relationship among environmental regulation, innovation, CO2 emissions, population, and economic growth in OECD countries: a panel investigation

Hashmi, Rubayyat and Alam, Khorshed (2019) Dynamic relationship among environmental regulation, innovation, CO2 emissions, population, and economic growth in OECD countries: a panel investigation. Journal of Cleaner Production, 231. pp. 1100-1109. ISSN 0959-6526


Promoting green innovation and regulating emissions through carbon pricing are the two fundamental driving forces of climate change policies on carbon abatement. However, the existing body of empirical evidence focusing on these inter-linkages is rather meager. Such evidence is also inconclusive in the context of the Organization for Economic Co-operation and Development (OECD) countries. This study, therefore, examines the effects of environmental regulation and innovation on the carbon emission reduction of OECD countries during the period 1999e2014. On the basis of the 'stochastic impacts by regression on population, affluence, and technology' (STIRPAT) model, this study also develops a new model called 'stochastic impacts by regression on population, affluence, regulation, and technology' (STIRPART) to extend the analysis on the evaluation of factors influencing carbon emissions. In addition,the effects of environmental regulations and environmentally friendly technologies are empirically tested by using panel fixed-effects, random-effects and Generalized Method of Moments (GMM) models with the DriscolleKraay corrected robust standard errors that tackle cross-sectional dependence and time and panel fixed effects. Results indicate that a 1% increase in environmentally friendly patent reduces carbon emissions by 0.017%, and a 1% increase in environmental tax revenue per capita reduces carbon emissions by 0.03% for OECD countries. The current contribution aims to optimize market-based instruments, such as patents and carbon pricing, for the implementation of efficient and cost-effective climate change policies.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Permanent restricted access to Published version, in accordance with the copyright policy of the publisher.
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Commerce (1 July 2013 -)
Faculty/School / Institute/Centre: Current - Institute for Resilient Regions - Centre for Health, Informatics and Economic Research (1 Aug 2018 -)
Date Deposited: 26 Nov 2019 04:44
Last Modified: 17 Jan 2020 03:14
Uncontrolled Keywords: environmental technologies; patent; STIRPAT; STIRPART; carbon pricing; regulation; environmental tax
Fields of Research : 14 Economics > 1402 Applied Economics > 140205 Environment and Resource Economics
14 Economics > 1402 Applied Economics > 140202 Economic Development and Growth
14 Economics > 1403 Econometrics > 140304 Panel Data Analysis
Socio-Economic Objective: D Environment > 96 Environment > 9603 Climate and Climate Change > 960302 Climate Change Mitigation Strategies
B Economic Development > 85 Energy > 8505 Renewable Energy > 850599 Renewable Energy not elsewhere classified
B Economic Development > 91 Economic Framework > 9101 Macroeconomics > 910103 Economic Growth
Identification Number or DOI: https://doi.org/10.1016/j.jclepro.2019.05.325
URI: http://eprints.usq.edu.au/id/eprint/37344

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