Trade Openness and the Energy–Carbon Nexus: Policy Implications for Emerging and Advanced Economies

This study explores the intricate relationship between trade openness, energy intensity, technological innovation, and carbon emissions across emerging and advanced economies, emphasizing their implications for sustainable development. Using balanced panel data, the analysis employs the Method of Moments Quantile Regression (MMQR) and Dumitrescu–Hurlin panel causality approaches to capture heterogeneous effects across varying emission levels. The results reveal that trade openness plays a pivotal role in mitigating carbon emissions by facilitating access to cleaner technologies and promoting energy-efficient production processes. Conversely, energy intensity demonstrates a positive and significant association with carbon emissions, confirming the persistence of fossil fuel dependence in energy structures. Technological innovation exhibits asymmetric effects—reducing emissions in emerging economies while marginally increasing them in advanced economies due to rebound effects associated with industrial expansion. The causality analysis highlights bidirectional linkages among trade openness, energy intensity, and emissions, suggesting that economic and environmental dynamics are mutually reinforcing. These findings imply that both emerging and advanced economies must design integrated policies that align trade liberalization with energy transition strategies and innovation-driven decarbonization. The study contributes novel insights into the energy–carbon nexus by distinguishing the heterogeneous impacts of trade and innovation across different development stages, thereby offering actionable recommendations for achieving global low-carbon growth.