Does green innovation mitigate CO₂ emission, transport emission and carbon intensity in Asian developing economies?

This study investigates the long-term impact of green technology innovation (GTI) on carbon dioxide emissions (CO₂), including transport-related emissions (CO₂T) and the carbon intensity of GDP (CO₂I), across twenty selected Asian developing economies. To address cross-sectional dependence and heterogeneity across countries, the analysis employs advanced panel data techniques such as Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), Pooled Mean Group (PMG), and Augmented Mean Group (AMG) estimators. The empirical results demonstrate that GTI significantly reduces CO₂, CO₂T, and CO₂I in the long run across all model specifications. Moreover, the study reveals robust bidirectional causal relationships between GTI and each of the emission indicators, as confirmed by the Dumitrescu and Hurlin (D&H) panel causality test. Based on these findings, the study recommends strategic policy actions to promote a low-carbon economy specifically by scaling up investment in green technologies and increasing the share of green projects. Such measures are expected to substantially enhance environmental sustainability across Asian developing economies.