Technological changes and carbon neutrality targets in European countries: A sustainability approach with Fourier approximations

Abstract

The diffusion of net-zero technologies is highly recommended as European Union (EU) countries aim for carbon neutrality by 2050. Germany, France, and the Netherlands are EU countries that invest heavily in environmental patents, and the relationship between patent development and carbon reduction in these countries provides important clues for carbon neutrality goals. Therefore, this study examines the effects of technological change (environmental patents), human capital, and income on carbon (CO2) emissions for three EU member countries over the period 1974–2019 under the Environmental Kuznets Curve (EKC) hypothesis. For this purpose, the study applies the Fourier-ADL approach and various time series estimators. The results of the study show that the EKC hypothesis is valid for EU countries and that human capital contributes to carbon reduction. Moreover, environmental patents contribute to CO2 mitigation in Germany, but environmental patents do not have a significant effect on emission reduction in France and the Netherlands. These results suggest that France and the Netherlands should invest more in environmental patents and, like Germany, benefit from the CO2 reduction effects of environmental patents.