Energy innovations are critical to combating global warming and climate change. In this context, we focus on the impact of energy research-development (R&D) expenditures, which are the input of energy innovations, on CO2 emissions. For this purpose, we investigate the effect of disaggregated energy R&D expenditures on CO2 emission in 19 high-income OECD countries over the period 2003-2015. The dynamic panel data method is followed for empirical analysis. The results of the study show that R&D expenditures for energy efficiency and fossil energy have an increasing effect on CO2 emissions. Contrary to expectations, there is no significant relationship between renewable energy R&D expenditures and CO2 emissions. Remarkably, there is strong evidence that the power and storage R&D expenditures have a reducing effect on CO2 emissions. In light of the empirical findings, policy implications and recommendations to potential readers and authorities are further discussed.
Keywords: CO2 reduction; Energy innovation; Generalized method of moments (GMM); OECD; STIRPAT.