Carbon neutrality target for leading exporting countries: On the role of economic complexity index and renewable energy electricity.

Abstract In order to contribute to the existing limited energy-environment literature, the present study analyze the carbon neutrality targets of the 16 major exporting economies while considering the role of economic complexity and renewable energy electricity consumption empirically by investigating the most recent dataset covering the period from 1990 to 2019 by employing advanced econometric techniques. This study uses the economic complexity index, connecting the country's productive structure with the amount of knowledge that the products represent. Employing various cointegration and regression techniques such as augmented mean group (AMG) and dynamic ordinary least square (DOLS) confirms the long-run cointegration among the variables such as economic growth, economic complexity, renewable energy consumption, and CO2 emission. Also, this study provides evidence that confirms the validity of the environmental Kuznets curve hypothesis in the leading exporting economies. Regarding the carbon neutrality target, we found that both economic complexity and renewable electricity, if increase by one percent each, significantly reduce CO2 emissions by 0.1491 (AMG) and 0.130% (DOLS) and 0.160 (AMG) and 0.203% (DOLS), respectively, that help attain the carbon neutrality target.