Determinants of transport sector emissions in G20 nations under fossil fuel subsidies low carbon technologies trade and public services

Abstract

Over the last decade, there has been a significant rise in CO2 emissions from transportation contributing to climate change. This study explores the factors influencing emission levels from the transport sector, such as low-carbon technology adoption, fossil fuel subsidies, public service quality, environmental goods advantage, trade openness, and demographic influences in G20 economies by employing a multi-path Structural Equation Modeling (SEM) approach. Our study integrates socio-economic, environmental, and demographic dimensions through the lens of six theory-driven hypotheses by employing a balanced panel data of 19 G20 Nations from 2010 to 2023 (266 observations) using SEM to assess direct, mediated, and moderated effects. This study reveals that reduced CO2 emissions cannot be achieved through a single policy but are a systemic interplay among economic incentives, policy support, technological progress, and environmental governance. The study findings show that (1) A one-standard-deviation increase in low-carbon technology adoption led to a 0.032 standard-deviation decrease in CO2 emissions in the transport sector. (2) Fossil fuel subsidies are directly linked to increased emissions in the transport sector, indicating a significant positive relationship (β = 0.026, p < 0.05). (3) The results indicate that electric vehicle adoption significantly reduces transport emissions (β =  − 0.163, p < 0.001). Lower transport emissions are further linked to comparative advantages in environmental goods that stem from structural aspects rather than technology, and (4) Trade openness correlates with reduced transport-sector CO2 emissions (average β ≈ − 0.237), while public service quality shows a positive relationship with emissions (average β ≈ 0.158).