Economic Globalization and Environmental Technology: Implications for Environmental Degradation in G7 Countries

The global ecological conditions are degrading rapidly, and even after the commitment to achieve Sustainable Development Goals by 2030, G7 countries still struggle to meet basic environmental standards. This study offers a novel marginal contribution by analyzing how economic globalization (EG), economic growth intensity (EGI), financial innovation (FI), and environmental technology (ET) influenced environmental degradation (ED) in the G7 countries from 2000 to 2021. Using the Method of Moments Quantile Regression (MMQR) alongside Driscoll and Kraay Standard Error (DKSE), this research provides a first-of-its-kind distributional mapping that accounts for cross-sectional dependency and heterogeneous slopes. Crucially, the findings reveal a “decoupling failure” in advanced economies, where the existing treatment mechanism for ET is insufficient to separate industrial growth from emissions due to institutional discrepancies. While FI is often viewed as a green catalyst, this study identifies it as a “double-edged sword,” showing that it significantly increases environmental degradation in higher quantiles due to carbon-intensive global supply chains. Conversely, EGI is discovered to be mitigatory, suggesting that enhancing financial efficiency and growth soundness can diminish ecological damage. This research fills a critical literature gap by reconciling the Pollution Haven Hypothesis and Green Finance Theory, providing empirical evidence that developed financial systems may inadvertently exacerbate damage if not specifically aligned with green mandates.