Does green innovation play a crucial role for environment sustainability? Evidence from ASEAN countries.

In the face of escalating environmental challenges, green innovation has emerged as a pivotal strategy for reconciling economic growth with ecological sustainability, particularly in rapidly industrializing regions such as Southeast Asia. This study investigates the role of green innovation in mitigating carbon dioxide (CO2) emissions across ten ASEAN countries from 2000 to 2023. Employing the STIRPAT framework and a Panel Autoregressive Distributed Lag (ARDL) model with Pooled Mean Group (PMG) estimation, the analysis captures both short-run dynamics and long-run equilibrium relationships. Green innovation is examined both as an independent variable and a moderator in the relationship between economic growth and environmental degradation. The findings reveal that green innovation significantly reduces CO2 emissions, while economic growth, energy consumption, industrialization, and trade openness exacerbate environmental impact. Robustness checks using alternative proxies-renewable energy consumption and green foreign direct investment-affirm the consistency of these results. The study offers region-specific policy insights, emphasizing the need for innovation-led strategies, clean energy transitions, and sustainable trade frameworks to achieve long-term environmental goals. By integrating theoretical and empirical perspectives, this research underscores the transformative potential of green innovation as a cornerstone of sustainable development in ASEAN.