Future of hydrogen energy: The role of environmental policy and political globalization

Abstract

Alternative and carbon-free energy sources are widely recognized as drivers of clean and green ecosystems and sustainable development. Hydrogen energy is gaining popularity as a carbon-free energy source and can replace fossil fuel-based energy sources. Therefore, it is important to estimate the determinants of hydrogen energy. This analysis aims to investigate the effects of environmental policy stringency and political globalization on hydrogen energy in the top seven hydrogen-innovating economies using the CS-ARDL methodology. The long-run results indicate that stringent environmental policies and political globalization positively impact hydrogen energy technology. In contrast, in the short run, only the environmental policy fosters hydrogen technology, whereas the other factors do not exert a significant influence on hydrogen energy technology. In the long run, a 1 % rise in the environmental policy stringency enhances the production of hydrogen-related technologies by 0.212 %, while in the short run, the hydrogen energy technologies improve by 0.20 %. The rise in political globalization by 1 % leads to enhanced development of hydrogen energy by 1.825 %. However, in the short run, we did not find any noticeable influence of political globalization on hydrogen energy. Similarly, with the 1 % rise in economic growth and financial development, hydrogen technology improves by 0.121 % and 2.342 %, in the long-run. Given the positive influence of environmental policy and political globalization on hydrogen energy, the study suggests that policymakers need to design strict environmental policies and encourage international collaboration to develop hydrogen technology.