This paper investigates the impact of green technology innovations on carbon dioxide (CO2) emissions based on a data panel covering 71 economies from 1996 to 2012. Specifically, we examine whether the level of income matters for the effect of green technology innovations. It is found that the impact of green technology innovations exists a single threshold effect regarding the income level. Specifically, green technology innovations do not significantly contribute to reducing CO2 emissions for the economies whose income levels are below the threshold while the mitigation effect becomes significant for those whose income levels surpass the threshold. But the transition of regime occurs at an extremely high-income level. In addition, we find that the relationship between per capita CO2 emissions and per capita GDP is inverted U-shaped, and urbanization level, industrial structure, trade openness, and energy consumption structure also significantly affect CO2 emissions. Finally, this paper suggests that mechanism innovations should be implemented to reduce the diffusion cost of green technology in undeveloped economies.

Introduction

It is widely acknowledged that human activity such as burning coal and oil is one of the leading causes of global warming. Ever since the Industrial Revolution, the global economy has been evolving at a fast pace, and people’s living conditions have been significantly improved, but improved productivity also brought severe air pollution worldwide. The World Energy Outlook 2017 cautions: “Despite their recent flattening, global energy-related CO2 emissions increase slightly to 2040 in the New Policies Scenario. This outcome is far from enough to avoid severe impacts of climate change.” Therefore, human activity is the genesis of global warming, and now humans are in urgent need of taking effective measures to protect the earth from climate disasters. Among various paths of climate change mitigation, the green technology (including renewable energy technology, energy efficiency technology, etc.) is expected to be a dominant factor that theoretically contributes to over 60% of targeted CO2 reduction in the International Energy Agency’s (IEA’s) 450 Scenario (IEA, 2013). But in different countries or regions, the research development and diffusion of green technology are typically not at the same pace. Hence the actual impact of green technology innovations might depend on specific social or economic circumstances (IEA, 2015). Thus, understanding the detailed relationship between human activity, green technology innovations, and CO2 emissions helps to protect the environment that we depend on.