Exploring the Nonlinear Effects of Technological Innovation and Globalization on Environmental Quality: A Global Evidence

Abstract

Environmental Vitality, the proposed 13th Sustainable Development Goal (SDG), highlights the utmost importance of protecting and enhancing the quality of the global environment. Recognizing that a healthy environment is fundamental for sustainable development, this goal aims to ensure clean air, clean water, diverse wildlife, and sustainable ecosystems for present and future generations. By setting clear targets to reduce pollution, protect the environment, and manage resources sustainably, SDG 13 seeks to unite nations in the maintenance of goodwill with the Earth, ultimately creating a prosperous, fair, and sustainable future for everyone. This study examines the correlation between technological innovation and globalization, environmental quality, and economic development across diverse global economies spanning the years 1990 to 2020. Employing an extensive panel quantile autoregressive distributed lag (PQARDL) approach, the nonlinear dynamics of this complex relationship are explored. Three distinct models are constructed to represent the global, developing, and developed economies, capturing variations in their technological advancement and globalization levels. The Environmental Performance Index (EPI) is adopted as a robust proxy for environmental quality, for capturing the multi-layered nature of this creation. Empirical results show that in contrast to popular belief, the Environmental Kuznets Curve (EKC) hypothesis applies only to developed nations. Notably, technological innovation, economic globalization, and renewable energy consumption show consistent and positive significant impacts on environmental quality across all three models. This indicates the potential of cutting-edge technologies and global connectivity in promoting a more environmentally sustainable trend. Since GDP has a significant negative influence on environmental quality, it is clear that there is a need for economic policies that carefully separate economic expansion from environmental degradation.