Which Publicly Financed Green Technology R&D Option Most Effectively Drives Carbon Productivity? Instances of Energy Efficiency, Renewables, Nuclear, Hydrogen, and Energy Storage

Abstract

As a strategy, countries seek ways to improve national income and, at the same time, keep carbon emissions minimal. Such a scenario is captured by the respective economies' carbon productivity (CP) scores. Remarkably, it is expected that technological advancements could be harnessed to achieve CP. Hence, many countries have publicly invested in green technologies R&D, including energy efficiency, renewables, nuclear, hydrogen, and energy storage. However, existing studies did not verify the specific contributions of these technological advances to CP, leaving a notable void in the literature. Hence, the current research verified various green technology R&D contributions to CP. Based on panel data from 2003 to 2022, this study implemented the novel instrumental variable quantile regression technique for updated insights. The study uncovers the heterogeneous contributions of each energy innovation variant to the quantile distributions of CP. The heterogeneous effects underscore each country's changing economic structures and varied energy innovation implementation paths. Hence, policy consistency is key to driving CP and ensuring environmental compatibility. R&D on renewable, nuclear, and energy efficiency technologies contributed most significantly to CP across the distributions. R&D on hydrogen and energy storage technologies contributed the least to CP. Therefore, allocating more funds to all R&Ds that boost energy-enhancing technologies for overall environmental sustainability is expedient. Such proactive and integrative policies consistent with SDGs 7 and 13 would reduce carbon emissions while escalating national income. Meanwhile, isolated and inconsistent funding should be discouraged for overall environmental progress. A robustness evaluation based on SIVQR produced corroborative evidence.