The impact of renewable energy consumption, green technology innovation, and FDI on carbon emission intensity: Evidence from developed and developing countries

Using 33 developed and 42 developing countries from 2000 to 2019, this study compares the heterogeneous impacts of renewable energy consumption, green technology innovation, and foreign direct investment (FDI) on carbon emission intensity (CEI). It is noteworthy that few studies have examined their collective impact on decreasing CEI from a comparative perspective among wealthy and poor nations, which is crucial for the formulation of targeted policy recommendations. Additionally, it also examines whether FDI moderates the mitigating effect of green technology innovation on CEI. Methodologically, multiplied models of pooled ordinary least square (OLS), two-way fixed effect, random effect, and fixed effect are employed to undertake asymmetric impact analysis. The endogeneity problem is addressed using both the System generalized method of moments (GMM) model and the instrumental variable approach. There is an interesting discovery: the marginal reduction effect of renewable energy consumption on CEI is much stronger in emerging countries with higher CEI compared to developed countries. Furthermore, implementing green technology innovation leads to a noticeable reduction in CEI in developed and developing countries, but the latter is still more effective. Moreover, FDI has a Pollution Haven effect on CEI in poor countries, whereas the anticipated Pollution Halo effect does not materialize in wealthy nations. Also, FDI acts as a mediator, reducing the adverse effects of green technology innovation on CEI in developing countries. This suggests that both Pollution Haven and Pollution Halo effects coexist in these regions, providing valuable insights into the conflicting results found in relevant studies. These findings provide practical insights for policymakers to customize successful measures to decrease CEI, especially in developing countries. Despite the substantial conflict they confront between environmental conservation and economic growth, their green measures are more effective than those of wealthy nations.