Environmental Innovation and CO2 Emissions in Asian Countries

This study analyzes the relationship between environmental innovation and carbon dioxide emissions in 26 Asian countries from 1990 to 2019, using a two-way error component model. Specifically, the Asian countries are classified into high- and middle-income countries based on income levels, and into high- and low-effectiveness countries based on the index of government effectiveness. The results indicate that environmental innovation reduces CO2 emissions. In particular, environmental innovation in high-income countries is more effective in reducing CO2 emissions than in middle-income countries. Additionally, environmental innovation in countries with low effectiveness does not impact CO2 emissions reduction, whereas environmental innovation in countries with high effectiveness does. As environmental innovation is confirmed to have a positive impact on reducing CO2 emissions, countries should strive to support environmental innovation to achieve environmental improvement.