The Impact of Green Energy, Fossil Fuels, and R&D on Environmental Degradation: Evidence from G7 Countries

The G7 countries ‒ Canada, France, the United States, Germany, Italy, Japan, and the United Kingdom ‒ struggle with sustainable development and face significant environmental challenges. This study investigates how demographics, GDP, research and development (R&D) spending, and consumption patterns in these economies impact greenhouse gas (GHG) emissions from 1994 to 2023. We use various statistical methods to analyze the data, including cross-sectional dependence tests, slope homogeneity analysis, second-generation unit root tests, and an advanced cross-sectional autoregressive distributive lag (CS-ARDL) model. Our findings suggest that while rising GHG emissions are linked to population and disposable income increases, these factors alone do not significantly affect emissions. The primary driver of environmental degradation is fossil fuel use. Conversely, green energy sources, nuclear power, and R&D investments reduce ecological harm. The fossil fuel sector remains the largest emitter of GHGs, while renewable energy sources have the most significant potential for reducing emissions. The study recommends that G7 countries focus on enhancing their energy policies by increasing their use of renewable and nuclear energy and continuing to invest in R&D. Moreover, promoting education, supporting sustainable economic growth, and reducing fossil fuel consumption are crucial for advancing sustainable development.