Abstract
This study investigates the role of solar energy, environmental policy stringency (EPS), and climate technology in realizing environmental sustainability in OECD economies from 2001 to 2018. The preliminary findings confirm the issues of slope heterogeneity and cross-sectional dependency; thus, we apply the cross-sectional augmented autoregressive distributed lags (CS-ARDL) model. The overall results indicate that solar energy, EPS, and climate technologies are playing a positive and significant role in encountering environmental issues and ensuring environmental sustainability in the long run, while economic growth is the key driver of environmental degradation. A similar insight is observed in the short run; however, their coefficient size and significance substantially vary. Moreover, the Error Correction Term is significantly negative, implying the convergence towards long-run equilibrium in case of any shock in the short-run. These results are consistent with alternative estimators and suggest the promotion of solar energy, implementation of stringent ecological policies, and climate technologies to achieve inclusive and sustainable growth.
•Cross-sectional dependence, Slope heterogeneity and cointegration properties exist.•Energy is reducing the environmental pollution like CO2 for OECD economies.•Economic growth is a direct contributor towards sustainability issues.