Technological innovation and environmental taxes toward a carbon-free economy: An empirical study in the context of COP-21

Abstract

Carbon emissions are the main factor in environmental degradation, associated with climate change and global warming, which puts environmental sustainability at risk. Carbon dioxide is the main element to mitigate to achieve climate neutrality on the planet, which is present in fossil fuels highly demanded power generation. This environmental concern, which entails all economic agents' responsibility, has not gone unnoticed, so in 2015 the Paris Climate Conference (COP: 21) was held, whose main objective is to reduce carbon emissions on the planet. Post Paris agreement generates pressure on the signatory countries since the objectives set are a real challenge to achieve environmental sustainability. Thereby, this research aims to examine the long-term determinants of carbon emissions in 19 countries of the European Union that were part of the COP: 21. The Method of Moments' Quantile Regression approach is used, which considers the effects of location and scale in the conditional distribution of carbon emissions. The results show that clean energy, technology and environmental taxes contribute to mitigating carbon emissions; however, economic activity and industrialization causes an increase in environmental degradation. From the results obtained, the findings suggest some policy measures aimed at offsetting carbon emissions.

Keywords: Carbon neutrality; Environmental tax; Paris climate conference; Renewable energy; Technological innovation.