Dynamic Relationship Between Green Innovation and CO2 Emissions in Southeast Asian Countries: A Panel ARDL Analysis Ryan Juminta Anward (a*), Helene Elisabeth Simon(b)
a) Faculty of Economics and Business, Universitas Airlangga, Indonesia
*ryananward[at]gmail.com
b) Faculty of Economics and Business, Universitas Airlangga, Indonesia
Abstract
Balancing economic development with environmental sustainability is an ongoing challenge for policymakers in Southeast Asia. Green innovation, which encompasses environmentally friendly technologies and practices, has emerged as a key approach for mitigating CO2 emissions. However, its true effectiveness within the diverse economic and policy landscapes of Southeast Asian countries remains underexplored. This research aims to examine the dynamic relationship between green innovation and CO2 emissions in six Southeast Asian countries-Indonesia, Vietnam, Thailand, the Philippines, Singapore, and Malaysia-using annual data from 2001 to 2019. By employing the Panel Autoregressive Distributed Lag (ARDL) model, we assess both the short- and long-run effects of green innovation on CO2 emissions and account for cross-country variations. Our findings reveal that, in the long run, patents on environmental technologies and renewable energy consumption significantly reduce CO2 emissions, whereas economic growth is positively associated with higher emissions. In the short run, renewable energy consumption continues to play a crucial role in reducing emissions. These results underscore the need for evidence-based environmental policies tailored to the specific contexts of each country to ensure sustainable development in Southeast Asia.
Keywords: Green innovation, CO2 emissions, Renewable energy, Economic growth, Panel ARDL
