Fact of the Week: In Singapore, a 1 Percent Increase in Green Tech Innovation Leads to a Long-Run 0.23 Percent Increase in GDP and a 0.4 Percent Reduction in Carbon Emissions

Source: Tang Meirun et. al. “The dynamic effect of green technology innovation on economic growth and CO2 emission in Singapore: new evidence from bootstrap ARDL approach,” Environmental Science and Pollution Research, September, 2020.

Commentary: Economic growth and environmental sustainability are often trade-offs for developing countries. Given Singapore’s rapid growth and high population density, development of green technology and environmental sustainability are especially important for long-term survival. Researchers found a positive impact on economic growth from Singapore’s green innovations, as well as short-term and long-term reductions in carbon emissions. Looking at data from 1990 to 2018, a team of researchers found that in the short run, a 1 percent increase in green technology innovation leads to a 0.1 percent increase in GDP and a 0.16 percent reduction in carbon emissions. In the long run, the effects are even more pronounced, with a 1 percent increase in green technology innovation leading to a 0.23 increase in GDP and a 0.4 percent reduction in carbon emissions. With such significant impacts on economic growth and emissions reduction, the trade-off between economic growth and environmental sustainability may be overstated.