Exploring the Nexus between Housing Prices, Environmental Taxation, Green Technological Innovation, and Environmental Sustainability: Evidence from the U.S. Building Sector

This study aims to explore the impact of environmental taxation (ET) and technological innovation on carbon emissions. This study fills a critical gap in the existing environmental and finance literature by highlighting the effects of housing prices on carbon emissions within the United States building sector over the period from 1994 to 2021. The study employed the novel Augmented Autoregressive Distributed Lag (ARDL) method to assess the link between the tested variables. The study found that green technological innovation and ET positively affect carbon emissions reduction in the building sector, suggesting their positive role in enhancing ecological sustainability. Conversely, housing prices show a positive effect on carbon emissions from the building sector, emphasizing the critical need for ecological neutrality policies and the adoption of green energy alternatives in the building sector. The empirical quantification of HP’s long-run impact on building-sector CO 2 emissions constitutes a novel, robust, and policy-consequential finding that fundamentally challenges the implicit assumption that housing market conditions are environmentally neutral, establishing that no credible building-sector emissions reduction strategy can be designed without explicitly accounting for housing market dynamics. Therefore, based on these outcomes, this research provides implications for policymakers aimed at fostering a better environment in the building sector. The strategies and policies to reduce CO 2 in the building sector include enforcing standards and regulations such as ET, conducting impact assessments of housing prices, adopting green technologies, and restricting non-clean energy utilization.