Abstract:

This research work examines the non-linear effect of climate change on economic growth in a panel of 19 developed countries over the period 2007 to 2020. Following the methodology proposed by Lind and Mehlum (2010), our analysis provides empirical evidence supporting the presence of an inverted-U relationship between climate change and economic growth, revealing a threshold of approximately 3.529. Beyond this point, climate change may begin to adversely impact economic growth. The empirical results suggest that in the early stages of economic development, developed countries tend to rely on energy-intensive industries, yielding to an inevitable increase in CO2 emissions. Furthermore, our analysis demonstrates that technological innovation exerts a positive and significant impact on economic growth. In conclusion, this work emphasizes the importance of understanding the complex interplay between climate change, technological innovation, and economic growth for sustainable development. Ultimately, these results reveal the significance of not only striking a balance between economic growth and environmental preservation, but also promoting policies that promote technological innovation to stimulate sustainable economic development.