Carbon emissions and global R&D patterns: a wavelet coherence perspective

Abstract

This study examines the causality between Research and Development (R&D) and Carbon dioxide (CO2) emissions at the global level, utilising data gathered from 2000 to 2020 across various countries categorised as developed, developing, economies in transition, and least-developed. The data collected for the study are analysed using the Wavelet coherence methodology. The findings reveal both bidirectional and unidirectional causality between the variables, which have evolved over time. Globally, a bidirectional relationship is present in the short-term, no causality in the medium-term and unidirectional causality in the long-term. Developed countries exhibit a two-way causality in the short-term, while no causality exists in the medium-term and long-term. Developing countries show a bidirectional relationship across all time frequencies. In economies in transition, a bidirectional relationship appears towards the end of the period over the short, medium, and long-term. The least developed countries show no causality in the short and long-term, but a one-way causality in the medium-term. Governments and the policymakers can implement environmental policies to mitigate carbon emissions through R&D. The findings suggest targeted and strategic strategies to enhance the impact of R&D on emissions reduction. Policymakers can use this analysis to prioritize funding for clean energy innovations, establish incentives for low-tech technologies, and promote international cooperation in green technology research. Additionally, focusing on these carbon mechanisms and aligning R&D efforts to support development goals can increase the effectiveness of climate policies, ensuring a balance between economic growth and environmental sustainability.