Work

Relationship between R&D investment, financial development, energy use, and carbon dioxide emissions in USA: New insights from ARDL methodology

Year: 2025

Type: article

Abstract: This study examines the dynamic relationship between research and development (R&D) investment, financial development, energy use, and environmental pollution in the United States over the period 1990–2023, using the Autoregressive Distributed Lag (ARDL) approach. The results confirm a significant long-run cointegration among the variables. Specifically, a 1% increase in R&D investment reduces CO 2 emissions by approximately 0.45%, whereas a 1% rise in financial development and energy use increases emissions by 0.21% and 0.55%, respectively. The error-correction term indicates that about 63% of short-run disequilibrium adjusts to the long-run equilibrium annually. These findings highlight that while innovation significantly mitigates environmental degradation, unregulated financial and energy expansion exacerbate it. Policy implications suggest that US authorities should intensify green R&D incentives, promote sustainable financing instruments, and accelerate the transition toward clean energy to achieve national decarbonization targets.

Source: Cleaner Environmental Systems

DOI: 10.1016/j.cesys.2025.100362

Authors: Vu Ngoc Xuan, Pham Xuan Hoa, Nguyen Thi Phuong Thu

Institution: National Economics University

Language: English

Topic: Energy, Environment, Economic Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Climate action, Industry, innovation and infrastructure

Open Access status: gold

Estimated APC paid: $1,910