The roles of technology and Kyoto Protocol in energy transition towards COP26 targets: Evidence from the novel GMM-PVAR approach for G-7 countries
Özet
The investigation of the determinants of energy transition has become very attractive and popular due to the
Sustainable Development Goals and COP26 targets. However, one shortcoming of the existing studies is the
inability to understand the effects of technology and environmental policy to energy transition while the other
criticism is the use of conventional techniques that do not handle the endogeneity issue. Thus, this study investigates the impacts of technology and Kyoto Protocol in addition to several control variables to energy
transition by applying the novel econometric method of Sigmund and Ferstl (2021) on the annual data from 2000
to 2019 for G-7 countries. The empirical results confirm the positive and significant link between technology and
energy transition, such that, a 1% rise in technology enhances the energy transition by 0.32%. Similarly, Kyoto
Protocol has a significantly positive impact on energy transition. An explanation is that the Protocol is based on
principles and policies that emphasize the advanced and industrialized economies to enhance the environmental
quality by promoting the renewable energy resources and reducing the greenhouse gases. Furthermore, the G-7
authorities should start to provide subsidies to clean energy and technology-related investors and levy multiple
disincentives (i.e., higher tax rates) on the industries deploying the conventional and polluting methods for
energy production. Further policy implications are discussed in the study.
