The Role of Technological Innovation and Population Aging in Environmental Degradation in the Organization for Economic Co-operation and Development Countries

This article gives fresh insights into how technological progress and population aging affect environmental quality. Because of the recent findings of new green patents and the dramatic increase in the population over 65 years old across OECD nations, it is important to investigate the influence of these two occurrences on the present environmental degradation. In that context, a variety of econometric methods are applied for a panel data set of 30 OECD countries from 1995 to 2015. We find evidence for the beneficial effect of technological progresses in preserving the ecosystem. Interestingly, the effect of population aging is not linearly correlated with ecological footprint but follows an inverted U-shaped pattern. The empirical results of panel quantile regression also show that the impacts of these two factors are not uniform across nations, but rather rely heavily on the level of environmental quality. While trade openness and renewable energy help to enhance environmental quality, higher energy intensity significantly degrades the ecosystem. The environmental Kuznets curve hypothesis holds from the low to middle quantiles of ecological footprint distribution. Our results are robust to a variety of sensitivity tests. The study indicates that it is important to design the right environmental policy mix that considers both technological and demographic changes.