HOW INNOVATION AMPLIFIES THE IMPACT OF ENVIRONMENTAL POLICIES, CAPITAL FORMATION AND RENEWABLE ENERGY ON ECOLOGICAL FOOTPRINTS: EVIDENCE FROM G20 COUNTRIES

Increasing carbon emissions pose a significant challenge to global sustainability, especially among G20 countries that represent the majority of global energy consumption and industrial output. Although agreements to the Paris Agreement, several nations persist in grappling with the alignment of economic development and environmental preservation. This research examines the effects of renewable energy usage, technological innovation, urbanization, and foreign direct investment (FDI) on CO 2 emissions in G20 nations from 1990 to 2024. The research investigation employs a Cross-Sectionally Augmented Autoregressive Distributed Lag (CS-ARDL) paradigm, addressing cross-sectional dependency and heterogeneity while differentiating between short- and long-term dynamics. Findings indicate that economic expansion elevates emissions, whereas renewable energy and innovation mitigate them — both independently and in concert. Urbanization and FDI have modest beneficial impacts, highlighting the need for sustainable urban and investment strategies. The substantial negative error-correction term validates the long-term equilibrium among variables. Policy implications underscore that promoting innovation-led renewable transitions and executing synchronized G20 climate initiatives are essential for attaining low-carbon, equitable development.