Technology innovations and carbon neutrality in technologically advanced economies: imperative agenda for COP26

Abstract

This article aims to fill the literature gap while examining the role of green innovation, climate change adaptation technologies, technological diffusion, and environmentally related tax revenues in dealing with carbon neutrality among seven technologically advanced economies (T.A.E.-7) from 1990 to 2018. We employ advanced panel estimators to address slope heterogeneity and cross-sectional dependency issues. The long-run results show that green technological innovations and technological diffusions have significantly and negatively impacted carbon emissions in sample countries. Meanwhile, the role of environmental policy is also significant in addressing environmental vulnerabilities. These findings suggest that climate tech is imperative to ensure carbon neutrality in the long run; however, their marginal effects vary in magnitude, particularly concerning diffusion and adaptation. Similar results are endorsed using alternative estimators addressing endogeneity issues and recommending climate tech’s inclusive framework to support the green growth agenda.