Assessing the impact of energy R&D on green growth in OECD countries: a CS-ARDL analysis

Since the introduction of the OECD innovation and green growth strategies in 2007 and 2011, respectively, the OECD countries have been actively engaged in supporting green energy R&D to accelerate the development of clean energy technologies. Specifically, the OECD recognizes that both renewable energy R&D and energy efficiency R&D are key components of a low-carbon and sustainable energy system. This study aims to assess the impact of disaggregated energy R&D on green growth in 21 high-income OECD countries, from 1990 to 2021. Two key green growth indicators, namely energy productivity and CO₂ productivity, are used as response variables. The long-run CS-ARDL model results show that renewable energy R&D and fossil fuel R&D have a positive and significant impact on energy productivity in all model specifications, with renewable energy R&D exhibiting a relatively stronger impact compared to fossil fuel R&D. The long-run effects of the disaggregated energy R&D variables on CO₂ productivity align with the results of the energy productivity model. Based on the study's findings, policymakers should consider reallocating the energy R&D budget towards renewable energy R&D, fostering international collaboration between OECD countries in renewable energy R&D, and implementing technology-specific policies to encourage investment in renewable energy technologies.