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

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.