Nexus between green technology innovation, green financing, and CO2 emissions in the G7 countries: The moderating role of social globalisation

Policymakers face a daunting task when it comes to achieving sustainable environmental development and avoiding additional environmental degradation. This study examines the significance of green technology innovation and green financing in creating a more sustainable environment. The impact of green technology innovation and green investment on carbon dioxide (CO2) emissions has yet to be empirically and theoretically examined in the literature, especially in conjunction with a moderating component, particularly social globalisation. Accordingly, this research examines the role of green technological innovation and green financing in reducing CO2 emissions in the G7 countries. Our study uses empirical research data from a panel of the G7 countries covering the period 1995 to 2019. We employ advanced panel approaches to address panel data analysis concerns, such as cross-sectional dependence, structural break, and slope heterogeneity (the Banerjee and Carrion-i-Silvestre unit root and cointegration test and cross-sectional augmented ARDL). This study shows that green technology innovation (GINV) as well as green financing (GFIN) have a negative but significant impact on CO2 emissions. Whilst economic growth has shown a positive and significant impact on CO2 emissions in the G7 countries, social globalisation positively moderates the relationship between CO2 emissions and GDP, but negatively and significantly causes GFIN and GINV with CO2 emissions amongst the G7 countries. According to our study, countries would be able to meet the United Nations' SDG-7 and SDG-13 targets if they implemented green financing and green technology policies.