A Quantum Leap Towards Sustainability? Exploring the Interplay between Green Trade Exports and Environmental Performance in OECD Countries

Abstract The pursuit of economic growth, environmental pollution reduction, and the achievement of sustainable development are central concerns for numerous countries. In 2001, the WTO proposed the elimination of non-tariff barriers on environmental goods and services to mitigate trade barriers and reduce pollutant emissions, thereby enhancing the global trade industry chain. Several scholars have scrutinized the consequences of green trade on sustainable development. This study centers on assessing the impact of green trade exports (GTE) on green total factor productivity (GTFP) and greenhouse gas emissions, utilizing a panel dataset for OECD countries. Initially, a linear regression model is employed to observe that GTE fails to contribute to GTFP and is ineffective in mitigating CO₂ emissions. The relationship between GTE and GTFP exhibits an inverted N-shaped curve. Subsequently, a non-linear threshold model is established, revealing that GTE can foster GTFP growth when clean energy and research and development (R&D) exceed the first threshold value. Consequently, an augmentation in clean energy and technological intensity can lead to sustainable development in OECD nations. This study offers vital insights for developing countries seeking to participate effectively and efficiently in the global industrial chain, thereby reducing domestic development costs.