Do green technology innovation, environmental policy, and the transition to renewable energy matter in times of ecological crises? A step towards ecological sustainability

Over the past few decades, ecological damage has been humanity's greatest threat. It is possible that factors such as green technology innovation, environmental policy, and renewable energy consumption can play an essential role in the process of achieving ecological sustainability. Therefore, the present study aims to investigate the impact of green technology innovation, environmental policy, and renewable energy consumption, along with economic growth, trade openness, and urbanization, on ecological sustainability in the presence of the environmental Kuznets curve hypothesis for a group of G-7 economies from 1994 to 2018. For this purpose, we employed the long-run mean estimation approaches (FMOLS, DOLS, FE-OLS) along with the Panel Quantile Regression technique to produce the heterogeneous results at various levels of ecological footprint. The panel quantile regression findings report that green technology innovation, environmental policy, renewable energy consumption, and urbanization promote ecological sustainability by reducing the ecological footprint at all quantiles. However, the effect of renewable energy consumption on ecological sustainability is statistically insignificant at the 10th quantile. Further, the significant positive impact of economic growth and negative impact of economic growth square on ecological footprint confirms the environmental Kuznets curve hypothesis. Moreover, the findings indicate that trade openness stimulates the ecological footprint and, as a result, reduces ecological sustainability. Further, the findings of long-run mean estimates are similar to panel quantile regression outcomes. The findings of the present study suggest that the G-7 countries need well-designed strict policies that emphasize and help these countries increase the share of renewable energy consumption compared to nonrenewable and promote green technological innovation in G-7 through financial aid, and stringent environmental policy instruments (e.g., taxes) that help these countries ensure the ecological sustainability.