The role of environmental technologies, institutional quality, and globalization on environmental sustainability in European Union countries: new evidence from advanced panel data estimations

Abstract

AbstractFactors such as investments in environmentally clean technologies, globalization, and institutional quality significantly increase environmental quality. The study aims to provide light on how environmental technologies, institutional quality, globalization, and economic growth affect a sustainable environment. In addition, this study evaluates the European Union’s carbon zero target by 2050 and the results of achieving carbon neutrality by 2030, which was put on the agenda at the UN Climate Change Conference of the Parties (COP-26). For this purpose, ten countries (Germany, Austria, Denmark, Finland, France, Netherlands, Spain, Italy, Sweden, and Switzerland) that invest in the highest environmental technology in the European Union were selected in the study. The data range of the study is from 1990 to 2019. Also, the validity of the load capacity curve (LCC) hypothesis was investigated in these countries. The CCEMG and DCCE estimators were used to estimate long-run coefficients. When the panel was assessed as a whole, the LCC hypothesis was determined to be valid by both estimators. According to country-based results, it has been determined that the LCC hypothesis is valid only for Spain. The study also includes the following observations. (i) Environmental technologies increase LCF for Austria, improving environmental quality. (ii) Globalization reduces LCF for Austria. (iii) Institutional quality variable decreases LCF for Austria and increases LCF for Germany and France. These findings suggest that to attain a sustainable environment in the future, policymakers should raise research and development budgets for environmental technology, enhance the standards of institutions, and take globalization into account. Graphical abstract