Realizing Carbon Neutrality in Top-Emitter Countries: Do Green Technology Innovation, Renewable Energy, Financial Development, and Environmental Tax Matters?

As a result of the growing global climate crisis, many countries have pledged to cut carbon dioxide emissions and other greenhouse gas emissions to achieve net-zero emission goals. These goals can be successfully realized with the rollout of environmental regulations, utilization of green technology innovations, and a greater use of renewable energies. This study explores the influence of green technology innovations, renewable energy, financial development, environmental taxes, and economic growth on CO2 emissions in the 19 highest emitting countries from 1994 to 2022. The results reveal that renewable energy use and environmental taxes negatively affect CO2 emissions, reinforcing the essential role of these variables in the journey toward carbon neutrality. Green technological innovations, financial development, and economic growth have positive effects on CO2 emissions, suggesting that appropriate regulations and policies are necessary to attain net zero carbon emissions. The findings also indicate that financial development positively affects environmental quality by promoting green technological innovations. The causality results indicate a bidirectional causal link between green technology innovations, renewable energy, environmental taxes, economic growth, and CO2 emissions. Additionally, a unidirectional causal relationship exists between financial development and CO2 emissions. Based on these results, the study offers policy suggestions.