Environmental impact of multidimensional eco-innovation adoption: an empirical evidence from European Union

ABSTRACT

Establishing pathways to mitigate environmental degradation is a global concern which also gets reflected in 2030 Agenda of SDGs. Countries can promote sustainable economic development through eco-innovation. This study empirically examines the impact of eco-innovation on greenhouse gas emissions. The Driscoll-Kraay and PCSE estimation techniques are applied on European Union countries by covering a period from 2012 to 2019. The results found that environmental taxes and all dimensions of eco-innovation i.e. activities, output, resource efficiency, and socio-economic outcome significantly contributes towards reducing greenhouse gas emissions except the eco-innovation input. The socio-economic outcome is the most effective dimension of eco-innovation to reduce greenhouse gas emissions followed by the output and activity. The resource efficiency outcome is also significant in reducing environmental degradation, but its impact is the smallest. Energy consumption and economic growth has a significant positive and negative effect, respectively.

KEYWORDS:

• Innovation
• environment
• energy
• ecological footprints
• economic growth

JEL Classification:

• Q55
• Q56
• Q4
• Q57
• O44

Acknowledgements

Arooj Khan undertook review of literature, and collected data, performed empirical estimations, and analyzed the results. Alvina Sabah Idrees developed the conceptual model and provided useful insights in writing the draft. All authors read and approved the final manuscript.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Availability of data and materials

The datasets used and/or analyzed during the current study are available from the corresponding author on reasonable request.

Notes

1 The basis for Rio+20 Conference agreement are the characteristics of a green economy as it is an emerging concern for the current world.

2 Business as usual (BaU) in the environmental context is defined as excluding any direct measures attributed towards mitigating greenhouse gas emissions (Fei and Shuang-Qing 2012).

3 The European Union’s Research and Innovation Strategy 2020–2024 primarily focuses on green economy and digital transformation. The aim is to restore the ecosystem through research and innovation by introducing ‘green’ technologies, products and services, and management practices.

4 EU Eco-innovation index is equated with 100 (EU average is 100).

5 Note: The individual graphs on the relation between GDP and GHG for majority of the countries also showed a downward trend.

6 https://ec.europa.eu/info/sites/default/files/srip/2020/rec-19-003_srip_chap-6.pdf.

7 INP is the only dimension of eco-innovation that is positively related to GHG due to its vague determinants.