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The objective of this paper is to explore how environmental protection expenditures (EPE) affect innovation and investigate the potential causal relationship between the two variables. The novelty and main contribution of our paper to the literature stems from the fact that we look at total environmental protection expenditures from both the public and private sectors, and distinguishing between corporations and households in the private sectors. We also consider both inputs and outputs of innovation and address potential endogeneity issues in this relationship, which are both lacking in the current literature. Using a panel of EU countries over the period 2006–2020, this study generally finds a positive impact of EPE on innovation after controlling for the effects of trade, credit, education and inflation on innovation, and using the System GMM estimator to treat endogeneity. Moreover, EPE from the government sector drives the bulk of this positive impact. The core results are robust to alternative measures of innovation, alternative estimation techniques that address endogeneity (i.e., the Lewbel 2SLS, Mundlak, and Hausman-Taylor estimators) and the moderation effects of Climate Change Performance (CCPI). This study also provides a useful guide to policy makers engaged in environmental planning. • We evaluate the impact of environmental protection expenditures (EPE) on innovation in mainly EU countries. • We use longitudinal dataset for the group of EU countries over the period 2006–2020. • We find a positive impact of EPE on innovation. • The results are robust for observable heterogeneity, alternative measures of innovation and estimation techniques. • This study provides a useful guide to policy makers engaged in environmental planning. [ABSTRACT FROM AUTHOR]

[1,2] are two highly cited studies on the relationship between energy and development. These are two seminal empirical papers touching upon the notions of causation and correlation , respectively, as far as energy economics is concerned. This study is a comprehensive note on these notions' interconnectedness by revisiting both studies thoroughly and globally. None of these studies has ever been revisited at a global scale to the best of our knowledge. To this end, we first review deeper conceptual and philosophical concerns towards causation and correlation for making a clear distinction between true and spurious causation/correlation. We then develop a novel method to exclude spurious measures from the true ones. We also statistically test several hypotheses regarding the relationship between energy use and wealth creation as captured by income groups. We could not confirm a definite consistency in pair-wise causation between energy and welfare variables at the country levels and across distinct estimation periods. Nor could we denote any strong correlation between energy variables and wealth creation. Causation results are not surprising as previous studies asserted similar remarks. However, this study firmly says that these are mainly due to the circularity and non-linearity of the inter-relationships between energy and welfare variables over time, as new institutions might influence development processes. • Analysis of energy-welfare nexus by interconnected causation & correlation notions. • Making a novel distinction between spurious and true causation/correlation. • Identifying significant numbers of spuriosity and illusions in observed measures. • Rejecting any significant difference in correlation coefficient across income groups. • Revealing the cyclical dynamics of energy-welfare nexus through transition-matrices. [ABSTRACT FROM AUTHOR]

This study provide a bibliometric-based systematic literature review of academic research on the Environmental Kuznets Curve (EKC). The main aim is to identify the leading sources of knowledge in terms of the most influential journals, articles, and authors. Furthermore, a thorough content analysis of the 100 most influential papers is provided for identifying the important research attributes, such as the characteristics of data, methodologies, and major findings. The study identifies 1654 articles on EKC from Scopus-Indexed journals. Ecological Economics is the leading journal based on total citations (15,452), h_index (59), and the g_index (94). The most cited article in terms of total citations belongs to Stern, D. I. entitled "The rise and fall of the EKC curve", published in World Development in 2004. From the content analysis of 100 papers, we find that 66% used panel data. Fully Modified Ordinary Least Square (FMOLS) and Autoregressive Distributed Lag (ARDL) models are the most popular methodologies used in EKC studies so far. CO2 emission is a widely used variable to measure environmental degradation. The majority of the studies have confirmed inverted U-shaped EKC for both panel and time-series studies. The Granger causality results show that income Granger causes environmental degradation. For future direction, it would be interesting to investigate EKC hypotheses against a wider nature-economy nexus that could better explain the sources and causes of change in the type of such nexus. Additionally, adequate and appropriate exogenous variables that could explain external shocks into the nature-economy nexus. • This study offers a bibliometric-based systematic literature review and content analysis on the Environmental Kuznets Curve. • The study identifies 1,654 articles on EKC from Scopus-Indexed journals. • CO2 emission is a widely used variable to measure environmental degradation. • The average turning point of the Kuznets curve is at 9,260 USD (per capita). • The majority of the studies have confirmed inverted U-shaped EKC for both panel and time-series studies. [ABSTRACT FROM AUTHOR]