Long‐run relationship between R&D investment and environmental sustainability: Evidence from the European Union member countries

Abstract The researchers, environmental scientists and policymakers around the world are exerting substantial efforts to mitigate the growth of CO 2 emissions to save the planet. A number of measures and initiatives, such as, energy efficiency, renewable energy technologies and emission‐control are proposed in order to reduce CO 2 emissions. This study examines the long‐run relationship between R&D investment and environmental sustainability in a panel of 25 European Union (EU) member countries over a period of 17 years (1998–2014). We use robust and reliable econometric methods to capture the interactions between R&D investment on renewable energy consumption and CO 2 emissions. The findings confirm that the growth of R&D expenditures promotes renewable energy consumption and plays a significant role in reducing CO 2 emissions in the sample countries. Furthermore, the findings suggest that increasing the share of renewable energy consumption in the total energy mix also reduces CO 2 emissions. Given these results, we suggest that the EU policymakers provide more financial and regulatory assistance to the R&D activities, specifically in the energy sector, to ensure promoting low carbon economies in this region.

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