Does Environmental Innovation, Foreign Direct Investment and Renewable Energy Consumption Curb Environmental Quality Issues? Evidence from PMG-ARDL Approach

One of the major concerns for environmental quality improvement is to reduce reliance on fossil energy consumption. However, there is a possibility that economic developments like foreign direct investment (FDI), urbanization, innovation and renewable energy consumption can mitigate carbon emission and curb environmental quality issues. Hence this examines the impact of innovation, FDI, renewable energy consumption and urbanization on the environmental quality of 46 countries for the period of 1990-2021. The study employed pooled mean group auto regressive distributed lag stationarity estimator for the empirical results. The study findings depict that in the long run, trade openness and innovation positively influence environmental quality, whereas FDI does not significantly affect environmental quality deterioration. Renewable energy consumption plays an important role in relying on fossil energy consumption and reducing carbon emissions. This study gives insights into necessary policy endorsements for the sustainability of environment through innovation.