Abstract
Energy research and development (R&D) and environmental sustainability is often referred to as two interrelated trends, especially in the current context of the 4th industrial revolution. As a primary input of energy innovations, R&D in the energy sector constitutes a vital tool in addressing global environmental and energy challenges. In this frame, we observe the effects of disaggregated energy R&D on environmental pollution within the Environmental Kuznets Curve (EKC) framework in thirteen developed countries over the period 2003–2018. By employing the panel quantile regression technique, we find an inverted U-shaped nexus between economic growth and carbon emissions only in higher carbon-emitting countries, thus, confirming the EKC hypothesis. However, the U-shaped nexus is more predominant in lower carbon-emitting countries. As such, we demonstrate that there is not any single dynamic in the relationship between economic growth and pollution as reported in previous studies. Contrary to expectations, we find that energy efficiency research and development is more effective in curbing carbon emissions compared to fossil fuels and renewable energy research and development. The empirical results indicate also that only energy efficiency R&D mitigates significantly the CO2 emissions from the 50th quantile up to 90th quantile, although the magnitude of the negative sign is more pronounced (in absolute term) at the highest quantile (90th). In this light, our findings would guide policymakers in the establishment of sustainable energy research and development schemes that will allow the preservation of equilibrium for the environment while also promoting energy innovations.
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Data Availability
The datasets used and/or analyzed during the current study are available from the corresponding author on reasonable request.
Notes
Reader can reach detailed technical explanations about McFadden R2 through McFadden (1974) and Freese (2006).
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FB: data analyses, OLS, and quantile regression estimations, interpretation of the estimation results, appendix. SPN: introduction section, literature review, discussion of results, and policy recommendations. SK: literature review and QR methodology sections. YK: abstract, interpretation of the estimation results, discussion, and conclusion sections.
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Appendices
Appendix 1. Data definition
The IEA Energy Technology Research, Development, and Demonstration (RD&D) data give public energy (RD&D) expenditures prepared by the IEA. Data cover expenditures on RD&D by the central or federal government and state-owned companies (IEA International Energy Agency 2020a, IEA International Energy Agency 2020b, IEA International Energy Agency 2020c).
Energy efficiency RD&D is to reach energy efficiency to produce more commodity and services with less energy input by (i) employing the energy input in the industrial process efficiently (ii) developing more efficient and innovative techniques and/or processes through e.g. diversification and intensification and (iii) improving energy management systems within buildings through e.g. advanced lighting technologies to optimize the energy usage. Energy efficiency includes also enhancing appliance controls, designing energy-efficient vehicles, optimizing waste heat recovery and utilization (IEA International Energy Agency 2011; IEA International Energy Agency 2020b).
Fossil fuel RD&D expenditures aim at improving the production of fossil fuel sources (oil, gas, coal) through the techniques, equipment, and processes to advance the extracted fossil fuel sources. Research and development activities mainly include conventional but exclude non-conventional oil and gas production. The activities focus also on liquid and gaseous hydrocarbons, pipeline systems, and their evaluation, and research on submarine pipelines, and equipment such as microturbines, multi-fuel gas turbines, combustion turbines, mining mechanical preparation of coal and coal combustion (IEA International Energy Agency 2011; IEA International Energy Agency 2020a; IEA International Energy Agency 2020b; IEA International Energy Agency 2021a).
Renewable RD&D activities are to (i) enhance the techniques to generate thermal energy from solar radiation, (ii) develop the efficiency of solar heating and cooling, (iii) improve the manufacturing of photovoltaic equipment and systems, (iv) design and construct the solar thermal power plants, (v) improve the performance and the reliability of wind turbines and components, (vi) enhance the technology of tidal energy turbines, and (vii) improve the production of advanced and novel liquid biofuels. RD&D activities also consider the biomass-to-liquid technologies, increasing the density of solid biofuels, landfill gas, and purification of biogases, enhancing the heat and electricity from biofuels and geothermal energy (IEA International Energy Agency 2011, IEA International Energy Agency 2020a, IEA International Energy Agency 2020b, IEA International Energy Agency 2021a, IEA International Energy Agency 2021b).
Appendix 2. Panel unit root and cointegration tests
Breitung and Das (2005) panel unit root tests under cross-sectional dependence follow the null hypothesis that all the panels contain a unit root. The Hadri (2000) Lagrange multiplier (LM) considers the null hypothesis that all the panels are (trend) stationary. The Hadri (2000) Lagrange multiplier (LM) test includes the options of a time trend demean subtract cross-sectional means robust allow for cross-sectional dependence kernel (kernel spec) specify the method to estimate long-run variance. In both Breitung and Das (2005) and Hadri’s (2000) test, one can prefer the option(s) to include panel-specific means (fixed effects) and time trends in the model of the data-generating process as described in Stata 15.
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Bilgili, F., Nathaniel, S.P., Kuşkaya, S. et al. Environmental pollution and energy research and development: an Environmental Kuznets Curve model through quantile simulation approach. Environ Sci Pollut Res 28, 53712–53727 (2021). https://doi.org/10.1007/s11356-021-14506-0
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DOI: https://doi.org/10.1007/s11356-021-14506-0