ABSTRACT Climate change is a serious issue that threatens environmental stability all around the world and puts more responsibility on the countries of the European Union (EU) to promote sustainable development goals. This paper examines the relationships between energy intensity, research and development (R&D) expenditure, industrialization, economic growth, and CO 2 emissions for EU countries from 1995 to 2022. The study uses novel panel econometric methods, such as the Method of Moment Quantile Regression (MMQR) and Dumitrescu and Hurlin causality tests, as well as other estimators to capture distributional heterogeneity and dynamic interdependencies among the variables, thereby enhancing robustness. The empirical results show that a high level of energy intensity increases CO 2 emissions across most quantiles, whereas R&D expenditure, industrialization, and economic growth reduce emissions, indicating that economic growth and environmental degradation move in opposite directions. Furthermore, one can find direct causal relationships in both directions between the main variables, indicating their interdependence in determining the environmental outcome. These findings indicate that the EU has been supported by structural change towards energy‐efficient, innovation‐driven economic activities in the mitigation of emissions. The study highlights the importance of strategic energy‐saving policies, continued investment in innovation, and environmentally responsive industrial policies to balance economic growth and environmental sustainability, thereby supporting the achievement of Sustainable Development Goals 7, 8, and 13.
AlHares et al. (Mon,) studied this question.