The complementary role of human capital in innovation-driven decarbonization

Achieving net-zero emissions requires not only technological innovation but also the capacity to absorb and implement it effectively. This study investigates how absorptive capacity, defined as the interaction between tertiary education and R&D investment, amplifies the impact of innovation on carbon emissions. Using fixed effects and Difference-in-Differences models, the analysis shows that while R&D alone reduces emissions, its effect is significantly stronger in countries with higher levels of education. Mechanism analyses reveal that absorptive capacity enhances environmental outcomes by strengthening policy enforcement, accelerating the diffusion of green technologies, and improving energy efficiency. These findings highlight the importance of aligning education and innovation policies to unlock the full decarbonization potential of climate technologies.