The impact of eco-innovation on CO2 emission reductions: Evidence from selected petroleum companies

Abstract

80% of the world's energy demand is supplied by petroleum companies, whose operations are responsible for 37% of the greenhouse gas emissions. This paper uses the Porter hypothesis to examine the dynamic impact of eco-innovation on CO2 emission reductions in selected petroleum companies. Second-generation panel regression econometric techniques are conducted employing quarterly data over the period 2005-2016. Three actual eco-innovation indicators namely, investment (INV), training (TR), and, research and development (R&D), are used to capture the impact of eco-innovation on CO(2 )emission reductions in both short and long-term periods. The results reveal that INV significantly reduces CO2 emissions in the long-term, whereas R&D and TR make significant reductions in CO2 emissions in the short-term. This paper is a novelty that adds an original contribution to the relevant literature and has valuable implications for petroleum companies' managers to achieve growth purposes, efficient use of resources, and reducing harm to the environment. (C) 2020 Elsevier B.V. All rights reserved.