Innovation‐driven sustainability: the role of renewable energy for mitigating carbon emissions in <scp>G20</scp> economies

Abstract In recent times, substantial endeavors have been initiated to mitigate carbon emissions and enhance environmental sustainability. Despite these efforts, additional, comprehensive research is required to comply with the Paris Climate Agreement and prevent further increases in global temperatures. This study investigated the relationship between the use of renewable energy, technological innovations and carbon dioxide (CO 2 ) emissions between 1995 and 2019. This study employed the auto‐regressive distributed lag methodology to analyze the relationships between the examined variables in both the short and long term. To further support the validity of our findings, we used the fully modified ordinary least squares and dynamic ordinary least squares approaches. The test results show a significant long‐term inverse link between carbon emissions and renewable energy consumption. On the other hand, gross domestic product (GDP) growth, trade openness and technical innovation all have a beneficial effect on carbon emissions. Furthermore, the application of paired Dumitrescu–Hurlin panel causality tests indicates the presence of bidirectional causative linkages between GDP growth, CO 2 emissions, trade openness and technological innovation. Moreover, it is observed that technological advancement and economic expansion exhibit a unidirectional causal relationship. G20 leaders are maintaining their steadfast dedication to improving their economies and energy systems within the dynamic global energy and environment situation. In order to effectively reach carbon neutrality goals, the research suggests that policymakers should strengthen their support for environmentally friendly actions by putting in place proper environmental rules, encouraging the use of green technologies and investing more in renewable energy sources.