A Novel Panel of European Economies Pursuing Carbon Neutrality: Do Current Climate Technology and Renewable Energy Practices Really Pass Through the Prism of Sustainable Development

Abstract

Given the European Union's initiatives to embrace cutting-edge technologies and transition to greener energy sources, it is imperative to assess the influence of climate technology and renewable energy utilization on the environmental sustainability of its member states. This study contributes to the existing body of literature by undertaking a novel assessment of the implications of climate technology and renewable energy consumption on load capacity factor, one of the most encompassing environmental sustainability indicators. To this end, the study examines data from 1990 to 2021 employing the "Continuously Updated Fully Modified" (Cup-FM) and "Continuously Updated and Bias-Corrected" (Cup-BC) approaches, concentrating on the five most attractive European Union countries for renewable energy: Germany, France, Spain, the Netherlands, and Denmark. The paper also considers the ecological impacts of economic growth, foreign direct investment, and urbanization. The results reveal a negative relationship between climate technology and ecological quality. While renewable energy consumption exhibits a positive but statistically insignificant association with ecological well-being, economic growth, foreign direct investment, and urbanization are found to have detrimental effects on ecological quality. In opposition to widely held claims, these striking observations suggest that renewable energy consumption and climate technology are not yet well equipped to fight the global climate battle. The underlying reasons behind these outcomes are thoroughly discussed, and strategies targeting Sustainable Development Goals 7 and 13 are proposed to catalyze advancements in research and development of cleaner energy and green technologies for a sustainable future.