Do energy efficiency R&D investments and information and communication technologies promote environmental sustainability in Sweden? A quantile-on-quantile KRLS investigation

Abstract

In recent decades, climate change and ecological degradation have risen as highly intricate and disputed global concerns, despite the mounting global consensus advocating for prompt action on these pressing issues. This study examines the influence of investments in energy efficiency R&D, information and communication technologies, and structural changes on environmental degradation indicators like CO2 emissions and ecological footprint within the context of Sweden, utilizing data spanning from 1981 to 2021. Acknowledging the departure of the data series from normal distribution, alongside their manifestation of nonlinearity and instability, the study advocates for a nonlinear approach. To address this, the Quantile-on-Quantile Kernel-Based Regularized Least Squares (QQKRLS) methodology was introduced to delve into this interrelationship. The findings obtained from QQKRLS underscore the positive impact of investments in energy efficiency R&D, advancements in information and communication technologies, and structural changes in mitigating CO2 emissions and ecological footprint across a significant portion of quantiles, ultimately leading to an improvement in ecological quality. In light of these insights, it is suggested that the Swedish government undertakes a restructuring of its energy sector to tackle both carbon emissions and production losses simultaneously. This involves encouraging the adoption of environmentally friendly and efficient technologies in the production process, along with a transition towards a more service-oriented economy. This strategic shift aligns with both economic growth ambitions and ecological sustainability objectives.