Advancing Sustainable Development and the Net-Zero Emissions Transition: The Role of Green Technology Innovation, Renewable Energy, and Environmental Taxation

In the macro context of promoting sustainable development and achieving net zero emissions, the role of green technology innovation, renewable energy utilization and environmental policy is crucial. However, there is still a lack of consistent empirical evidence regarding the combined emission reduction effect of these three factors in OECD countries. This study aims to empirically examine the combined impact of green technology innovation (GTI), renewable energy consumption (REC), and environmental taxes (ETAX) on carbon dioxide emissions. We expect that the former two will effectively reduce emissions, while the effect of environmental taxes depends on their design. Based on the panel data of 35 OECD economies from 1990 to 2019, this study adopts the augmented mean group (AMG) as the main estimation method, and uses the common correlation mean group (CCEMG) for the robustness test. To control potential endogenous issues, the difference generalized method of moments (GMM) is also employed for estimation. The causal relationship between variables is tested using the Dumitrescu–Herlin method. The results show that, as expected, GTI and REC have a significant negative impact on carbon dioxide reduction. However, ETAX is positively correlated with carbon emissions and does not have statistical significance, which deviates from the ideal policy effect and suggests that there may be efficiency bottlenecks in the current tax design. The causality test further reveals that there is a significant two-way causal relationship between CO2 emissions and GTI, REC, ETAX, GDP, and fossil fuel consumption (FEC). Therefore, it is recommended that OECD countries give priority to expanding investment in green technologies and renewable energy infrastructure and re-evaluate and optimize environmental tax policies to effectively promote the transition to a low-carbon economy.