Can Clean-Tech Patents and Energy Productivity Enhance Carbon Productivity in a Fossil Fuel Exporting Economy? Lessons from Australia
DOI:
https://doi.org/10.54536/ajee.v5i2.8789Keywords:
ARDL, Carbon Productivity, Climate Change, Economic Growth, Emissions, Energy Productivity, Green-Tech Patents, SustainabilityAbstract
Within the concept of sustainable development, economic growth should be driven by low-carbon practices and improved carbon productivity. While several studies have focused on low-carbon economy delivery, little has been done on carbon productivity and its relationship with innovative green technologies. This study assesses the effect of green-tech patents and energy productivity on the carbon productivity of Australia using the ARDL long run form and bounds test between 1990 and 2020. The Westerlund’s variance ratio cointegration estimates indicate that all variables are integrated. The ARDL long-form and bounds estimates indicate that both green-tech patents and energy productivity help in the delivery of low-carbon productivity in Australia. The ARDL long form estimates further suggest that rising economic growth hinders improvements in carbon productivity levels of the Australian economy. Finally, the empirical outcomes of the Toda-Yamamoto test indicate (i) a one-directional causality from green-tech patents to both energy and carbon productivity; (ii) a rebound causal effect between economic growth and carbon productivity. For policy suggestions, the government of Australia could heavily invest in innovations in environmental technologies to improve carbon productivity levels and to determine progress towards reducing climate change by supporting corporations to consider carbon as a useful component and not a waste product. Second, the government could ground the carbon productivity concept in its commitments to reducing fossil carbon consumption. Corporations that perform well in delivering carbon dioxide emissions productivity could benefit from tax incentives and government grants. Finally, given that rising economic growth reduces or improves the Australian economy’s carbon productivity levels, the government could institute non-monetary awards for individuals or corporations with strong records of registered green-tech patents and green energy technologies.
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