Panel Evidence from EU Countries on CO2 Emission Indicators during the Fourth Industrial Revolution

Abstract

Research question and the most important issue in this paper relates to the determination of CO2 emission drivers in EU and the possibility of its reduction in the era of the fourth industrial revolution. EU strategies and economic policies are directed toward sustainable development, with special emphasis on reducing CO2 emissions towards carbon neutrality. The method used in this research is the Panel Generalized Method of Moments (GMM) two-step dynamic estimator on 27 EU countries in the period 2012–2019. The research resulted with the following findings: innovation activity, industrial structure and development, human capital, and institutional framework; these are all statistically associated with CO2 emission levels in a negative manner, thus, contribute significantly to the reduction in CO2 emissions. Following the empirical results, it may be concluded that reaching sustainable development goals requires the EU to enhance innovation activity, technological development, reshape its industrial structure, create high-quality human capital, and increase the quality of its public institutions.

The Link between Human Development, Foreign Direct Investment, Renewable Energy, and Carbon Dioxide Emissions in G7 Economies

“…Regarding the human development index (HDI), a negative effect is expected, as demonstrated by the studies by Bezić et al [23], Sezgin et al [24], Hussain and Dey [43], and Majewska and Gierałtowska [45].…”

“…The human development index (HDI) presents a negative effect on pollution emissions, showing an improvement in pollution emissions. The studies of Bezić et al [23], Sezgin et al [24], Akbar et al [25], Opoku et al [26], Hussain and Dey [43], and Majewska and Gierałtowska [45] show that the human development index reduces carbon dioxide emissions.…”

“…Following the position of some studies such as Szetela et al [12], Bezić et al [23], and Sezgin et al [24], we evaluate the impact of the human development index (HDI) on pollution emissions, and it is an alternative way of considering the EKC arguments.…”

“…As the study by Hussain and Dey [43] suggested, the link between income per capita and carbon dioxide emissions has been criticised in the literature more recently. However, when carrying out an analysis of the state of this association, it is observed that researchers have been using other variables such as the economic complexity index (e.g., Leitão [9]; Dogan et al [33]; Romero and Gramkow [44]) or the human development index (e.g., Bezić et al [23]; Sezgin et al [24]; Hussain and Dey [43]; Majewska and Gierałtowska [45]).…”

“…have been using other variables such as the economic complexity index (e.g., Leitão [9]; Dogan et al [33]; Romero and Gramkow [44]) or the human development index (e.g., Bezić et al [23]; Sezgin et al [24]; Hussain and Dey [43]; Majewska and Gierałtowska [45]).…”