The criticality of green innovations, eco-taxations, and ICT trade in developing green in the European union member States

Abstract

The European Green Deal (EGD) has set ambitious targets to make Europe climate-neutral by 2050, addressing urgent concerns related to sustainable development. It offers a project that uses green technologies to boost economic growth, lessen pollution, and promote sustainability in business and transportation. To achieve these goals, we employ Generalized Method of Moments to estimate a panel vector autoregressive model. The impact of eco-taxes, ICT commerce, and green technology on green development between 2000 and 2022 is then evaluated using impulse response functions (IRFs). The empirical study found that the sustainable development of EU-28 countries is impacted by shocks to eco-innovation, environmental levies, ICT commerce, economic growth, carbon emissions, green growth and renewable energy consumption. Green development is specifically aided by shocks to the ICT trade, eco-innovation, and renewable energy, whereas sustainable development is hindered by shocks to economic growth and ecotaxes. Furthermore, carbon-emission shocks boost green development for a short period before economic expansion raises emissions, thereby reducing green development. The ICT trade indirectly promotes green growth by lowering carbon emissions and increasing economic growth. Likewise, environmental taxes spur environmental innovation, thereby advancing green development. This significant study offers empirical insights into how ecotaxes, ICT trade, and green innovations can support the European Green Deal’s goals of reducing pollution, achieving climate neutrality, and fostering sustainable economic growth. It also provides a data-driven basis for policymaking that promotes sustainable development.