Dynamic effect of disintegrated energy consumption and economic complexity on environmental degradation in top economic complexity economies

The current paper explores the influence of disintegrated energy and economic complexity on CO₂ emissions (CO₂) in the top economic complexity economies. The model also incorporates other drivers of CO₂, such as technological innovation and economic growth. The current research utilizes data stretching from 1993 to 2018. The research employed Westerlund cointegration, fully modified OLS (FMOLS), dynamic OLS (DOLS), and method of moments quantile regression (MMQR) to evaluate these interconnections. The outcomes of the slope heterogeneity and cross-sectional dependence affirmed the use of second-generation techniques. The study confirmed the long-run association between CO₂ and the regressors. The results of the MMQR disclosed that in each quantile (0.1–0.90), renewable energy enhances the quality of the environment, while economic complexity and nonrenewable energy intensify CO₂. In addition, technological innovation enhances the quality of the environment from 0.1–0.70 quantiles, while from 0.80–90 quantiles, technological innovation intensifies CO₂. The EKC is also validated in each quantile (0.1–0.90). The DOLS, FE-OLS, and FMOLS outcomes also affirm the MMQR outcomes. These outcomes encourage policymakers to implement holistic economic and environmental policies that prioritize greener production processes for environmental reasons and meet the United Nations SDGs 7, 8, 13, and 17.