Are oil efficiency, hydro energy and environmental related technology solution for attaining carbon neutrality: insight on top energy transition economies?

Abstract To combat the escalating consequences of climate change issues, including severe weather phenomena, increasing global temperatures, and ecological degradation, global discussions on achieving carbon neutrality have intensified. These efforts emphasize the pressing necessity for societies to embrace sustainable solutions to resolve the climate change issue by systematically reducing carbon emissions. Meanwhile, the environmental effect of hydro energy, oil efficiency, and environmental related technology (ERT) remains underexplored, particularly in the top energy transition economies. Despite representing just 2% of the global population, these nations play vital role in advancing sustainable development, even as they account for roughly 3% of global energy-related CO 2 emissions. To tackle this, this research inspects the impact of oil efficiency, hydro energy, and ERT on CO 2 emissions in the top energy transition nations by using the cross-sectional dependence, slope heterogeneity, second-generation panel unit root test, Westerlund cointegration, and the Cross-Sectional Autoregressive Distributed Lag (CS-ARDL) method as the main estimator, which is capable of uncover both long and short run dynamics. Additionally, the study adopted the Augmented Mean Group (AMG) and the Dynamic Common Correlated Effects Mean Group (DCCEMG), as robustness check. The results of the CS-ARDL shows that while globalization and economic growth hinder ecological sustainability, ERT significantly mitigates CO₂ emissions. Furthermore, oil efficiency and hydro energy are identified as key drivers of carbon neutrality. These findings are reinforced by the AMG and DCCEMG estimations, alongside Granger causality analysis, which provide strong corroborating evidence. Given these insights, this study conclude that policymakers should introduce targeted incentives to accelerate investments in oil efficiency technologies and hydro energy infrastructure while simultaneously addressing regulatory and financial constraints. These nations need to establish public–private partnerships that prioritize resource allocation and enhance research and development in ERT and hydro energy, thereby promoting sustainable energy practices across sectors and attain carbon neutrality.