The relationship between public R&D expenditures in the field of energy and CO2 emissions: The case of OECD countries

Sustainability of energy policies was called into question due to problems such as the oil crisis in the 1970s, increased air pollution in the atmosphere, and large-scale nuclear accidents. Owing to the fact that, it is required a transformation in the energy system and the strengthening of renewable energy technologies. The states, which maintain their interventionist position in the field of energy, use many controlling, regulating, and directive tools. One of this tools is R&D incentives. R&D incentives can be in the form of direct R&D activities, providing incentives to companies operating in the energy field through loans and grants, or providing indirect financing with tax incentives. In this study, the environmental impact of public R&D expenditures in the field of energy in OECD countries between 2000 and 2020 was examined by panel data analysis method by creating an econometric model. According to the results obtained in the analysis, a long-term negative relationship was determined between public energy R&D expenditures and emissions. As a result of increased R&D expenditures in the field of energy, innovative activities, processes, and products become widespread, and so, energy efficiency increases and resource consumption decreases. Achieving the same output by consuming fewer resources reduces emissions due to energy consumption. In addition, R&D expenditures play a key role in the development and expansion of alternative energy sources such as renewable energy.