The Impact of Energy Consumption, Energy Efficiency, and Technological Advancements on CO2 Emissions in Belt and Road Countries

Abstract

Rising economic activities, industrialization, and production raise energy demand, and the increased use of energy from fossil fuels has a negative impact on environmental quality. Due to their higher energy density, fossil fuels are anticipated to dominate the future energy supply. It is possible for the usage of fossil fuels to be supplemented by the growth of renewable energy sources, investments in low-carbon automation, and the creation of an energy infrastructure. Environmental innovations and technologies may help increase energy efficiency and acquire renewable energy sources, which may lead to a reduction in energy consumption, the achievement of green energy, and an improvement in environmental quality. This study examines the impact of technological innovations on energy efficiency, energy demand, and carbon dioxide emissions in light of economic growth. From 1985 to 2019, panel data from Belt and Road initiative countries were utilized using static and dynamic panel models. The results support the significance of technological innovations in lowering energy consumption, increasing energy efficiency, and enhancing environmental quality. In addition, it was confirmed that the significant effects of energy consumption, economic growth, energy demand, and financial development on carbon dioxide emissions degrade environmental quality. According to the results, increased economic activity is the result of an increase in energy demand, while technological innovations and well-established financial institutions were found to be beneficial in reducing energy consumption, increasing energy efficiency, acquiring renewable energy sources, and boosting environmental quality. The results of this study have significant policy implications and recommendations for the sample countries.