Do green growth and technological innovation matter to infrastructure investments in the era of climate change? International evidence

Hai Trinh, Graham Squires, Michael McCord, Daniel Lo

Research output: Contribution to journalArticlepeer-review

Abstract

This study investigates the nexus between green growth, technological innovations, and infrastructure investment trends, through an international investigation of 56 countries for the period of 2000-2020. Based on the Environmental Impact by Population, Affluence and Technology (IPAT) and Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) frameworks, with a rich set of selected proxies, the study sheds light on the long-run nexus between infrastructure investments, green growth, and technological innovations in the era of climate change. We find that increases in global carbon emissions are associated with higher infrastructure investment needs for the sustainable development of the world’s economy. The economic costs of climate exposure are also reflected in technological innovations with higher investments in technological innovations such as low-carbon infrastructure and energy technologies, highlighting the roles of environment-oriented R&D and taxes in our global sample. The findings are critical to policymakers, NGOs, and intergovernmental organizations in promoting green finance and capital fund flows for sustainable infrastructure and technological transitions. The findings are validated through a set of econometric techniques and particularly crucial to emerging high-polluting and vulnerable economies with high climate risk exposure. This is due to employing non-renewable resources for economic growth, while facing an enormous investment need in green infrastructure and technologies for achieving Sustainable Development Goals (SDGs).
Original languageEnglish
JournalApplied Economics
Publication statusAccepted/In press - 29 Aug 2022

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