TOWARDS A CLEAN ECONOMY: THE ROLE OF ENVIRONMENTAL INNOVATION IN REDUCING EMISSIONS IN SWEDEN

Abstract

The present study investigates the role of environmental innovation, represented by the number of environment-related patents, in mitigating greenhouse gas emissions in Sweden during the period from 1990 to 2020. The study emphasizes that accelerated economic growth and increased energy consumption have exacerbated environmental problems, such as the rise of greenhouse gas emissions. This underscores the importance of transitioning towards a clean economy through advancements in technology, especially in the field of environmental innovation. Sweden serves as a pioneering model in areas of technology and sustainability, focusing on policies and investments that support environmental innovation. The study utilizes semi-annual data, conducting unit root tests to determine the degree of variable integration. The ARDL methodology is employed to verify the long-term relationship (co-integration) between greenhouse gas emissions and explanatory variables, including financial development, energy efficiency, GDP, and environmental innovation. The findings demonstrate that environmental innovation plays a positive role in reducing emissions in Sweden, with the potential for greater benefits in the long term if these technologies are adopted more widely.