The Heterogenous Impact of R&D and Green Innovation on Carbon Emissions in Europe

Research and development (R&D) and green innovation contribute to the development of new artificial intelligence technologies that can achieve energy efficiency and smart energy management. These advancements facilitate greater integration of renewable energy, consequently reducing dependence on power generation from fossil fuels and resulting in decreased emissions of carbon dioxide (CO2). However, CO2 emissions vary among European countries, and the im-pact of R&D and green innovation on CO2 may differ depending on the level of emissions. The objective of this study is to examine the heterogeneous impact of R&D and green innovation on CO2 emissions in European countries. The panel quantile regression approach is used to investigate this objective in 29 European countries spanning from the year 2000 to 2019. Based on the results, the indica-tors for R&D, namely expenditures on R&D, are only effective in reducing CO2 in countries with a low level of CO2 emissions. Conversely, patent applications are found to contribute to higher CO2 emissions. As for the green innovation indicators, environment-related technologies are effective in minimizing CO2 emissions in countries with a high level of CO2, while climate change adaptation technologies significantly reduce CO2 emissions in countries with a low level of CO2. The novelty of this study lies in considering the diverse impact of R&D and green innovation on environmental issues. The implications of this study demonstrate that the prioritization of specific technologies and innovations in cli-mate change mitigation efforts differs among countries with varying levels of CO2 emissions.