Technological innovation and energy transition in G7 economies: Country-specific evidence from quantile and wavelet approaches

The aim of this study is to examine the impact of technological innovation on renewable energy consumption in the G7 countries. Annual data covering the period 1985-2021 are used, and the analysis focuses on the G7 countries, including Canada, Germany, France, Italy, Japan, the United Kingdom, and the United States. Renewable energy consumption is considered the dependent variable, while technological innovation is represented by patent applications. In order to analyse the relationship between the variables across different distribution levels and time scales more comprehensively, the Modified Cross Quantile Regression (MCQR), Quantile-on-Quantile Kernel Regularized Least Squares (QQKRLS), and Wavelet Quantile Granger Causality (WQGC) methods are employed. The empirical findings reveal the existence of a nonlinear and quantile-dependent relationship between technological innovation and renewable energy consumption. The results also indicate that the impact of technological innovation on renewable energy consumption exhibits a heterogeneous structure across countries and varies across different quantiles. In addition, the findings identify the presence of time- and quantile-dependent causal relationships running from technological innovation to renewable energy consumption. The findings of this study provide important implications for policymakers, energy sector stakeholders, and researchers by improving the understanding of the role of technological innovation in shaping energy transition policies.