Assessing the role of energy R&D efficiency in advancing environmental sustainability: Evidence from France with new ILCC hypotheses and soft structural changes.

This study explores the nexus between economic growth, sectoral energy R&D efficiency, and environmental sustainability in France from 1990 to 2022. Environmental sustainability is measured through the Inverted Load Capacity Factor (ILCF), which reflects ecological stress relative to biocapacity. A novel framework is developed by testing the Inverted Load Capacity Curve (ILCC) hypothesis while incorporating soft structural shifts via Fourier functions. Methodologically, the Fourier Engle-Granger cointegration test is applied to identify long-run relationships, supported by FMOLS and CCR estimators, with DOLS employed for robustness. The results confirm a U-shaped ILCC, indicating that while early stages of growth improve sustainability, beyond a threshold, further economic expansion intensifies ecological pressure. Sectoral R&D efficiencies reveal asymmetric effects: improvements in nuclear and renewable energy R&D contribute positively to sustainability, whereas fossil energy R&D inefficiencies exacerbate environmental degradation. Fourier Granger causality analysis further demonstrates unidirectional causality from GDP to ILCF and renewable energy R&D efficiency, underscoring the dominant role of economic growth in shaping environmental outcomes and driving innovation dynamics. Strong interactions between renewable and nuclear R&D efficiencies highlight their complementary nature, while fossil energy R&D shows no significant causal influence on other variables. Overall, the findings emphasize that sustainable growth in France requires aligning economic expansion with innovation-led energy policies. Targeted R&D investments in nuclear and renewable technologies are critical for reducing long-term environmental risks, while fossil-based R&D appears ineffective in advancing sustainability. This study thus provides novel policy-relevant insights by integrating energy R&D effectiveness into environmental sustainability analysis through advanced Fourier-based econometric approaches.