Ryan Anward
Faculty of Economics and Business, Universitas Airlangga

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Green Innovation, Renewable Energy, and Institutional Quality in Driving CO₂ Emission Decoupling: Evidence from Developing Countries Ryan Anward; Deni Kusumawardani; Lilik Sugiharti
JIEP: Jurnal Ilmu Ekonomi dan Pembangunan Vol. 9 No. 1 (2026)
Publisher : PPJP ULM

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20527/jiep.v9i1.2959

Abstract

This study examines CO₂ emission decoupling in developing countries as a broader indicator of sustainable economic performance, not merely as emission reduction. Specifically, it analyzes the roles of green innovation, renewable energy consumption, and institutional quality in explaining whether economic growth can be increasingly separated from CO₂ emissions through technological capability, energy-system transition, and governance capacity. Using panel data from 34 developing countries over the period 2002–2021, the study applies the Tapio decoupling index to measure CO₂ emission decoupling status and transforms the resulting classification into an ordinal variable with three categories: negative decoupling, coupling, and decoupling. The determinants of decoupling status are analyzed using a panel generalized ordered logit model with average marginal effects estimation. The results show that green innovation significantly increases the probability of a country being in the decoupling category. Renewable energy consumption has no statistically significant effect. Institutional quality is negatively associated with decoupling, whereas its interaction with renewable energy is not statistically significant. Population has a significant negative effect on the probability of decoupling. Overall, the findings identify green innovation as a robust positive determinant of decoupling performance in developing countries, while the roles of renewable energy and institutional quality remain constrained in supporting low-carbon transition.