Elyas Abdulahi Mohamued

Recently, sustainable economic growth has taken the front line of the global development agenda. The common dependency on fossil fuel energy, greenhouse gas (GHG) emissions and the continuous rising demands for energy have posed challenges that put the world in a climate change trap. This work empirically analyzes the effect of innovation, oil price, oil price volatility and economic growth on GHG emissions over the period of 1991–2015. The study compares the emission level between European Union countries (EU) (26), oil-producing countries (22), China and the United States of America (USA) using the Driscoll–Kraay model. The main empirical finding points to a positive effect of innovation on GHG emission reduction initiatives in oil-importing economies. Particularly, EU countries significantly minimized emissions due to innovation, followed by China and the USA. Contrarily, the effect of innovation increases GHG emission in oil-exporting economies. The results also indicate broader significant effects of oil price and oil price volatility on GHG emission. Interestingly, the effect of oil price on GHG emission is asymmetrical between oil-exporting and -importing economies. Oil price increases in oil-importing countries decrease GHG emission; contrarily, its effect increases emissions in oil-exporting countries. Thus, oil-exporting countries lack motivation to decrease emission levels due to oil price escalation. Unlike the oil price, oil price volatility comparably decreases GHG emissions in oil-exporting and -importing economies. Thus, one might be tempted to take oil price volatility and the future uncertainty of oil price as a virtuous instance rather than oil price increment. Thus, policymakers need to pay attention to market forces and policy measures to monitor GHG emissions due to economic activities. The results are also robust under the alternative econometrics estimation model of generalized method of moments (GMM)-Differenced.

Interest in the rapid growth of CO₂ emissions, together with the economic performance of various countries continues to attract researchers and practitioners’ interest. Alongside, concerns regarding global warming and its effects on human and animal health, and thus sustainable development, escalate. The present study employs the nonlinear autoregressive distributed lag to identify short- and long-run dynamics and the asymmetric nexus between absorptive capacity, and CO₂ emissions intensity from 1970 to 2018 in the case of the USA and China. In the short-run, an increase in technology transfer based on human resources increases CO₂ emissions in China. Contrarily, the decrease in technology transfer based on infrastructure has an emissions-decreasing effect in China. In the long-run, the effects of an increase in absorptive capacity based on innovation and infrastructure developments provide positive and significant impetus to mitigate the carbon intensity in China and the USA. The results are robust using GHG intensity. Thus, policymakers and researchers have to consider the pivotal role of absorptive capacity in facilitating sustainable development.