Providing more affordable and cleaner energy for all raises complex and significant financial, political,
technical, and institutional issues, which must all be addressed to ensure sustainable development.
Energy technology innovation has a critical role to play as one of the best pathways to achieve the
transition to a global clean energy system. This paper is an endeavor to study the impact of government
energy technology research, development, and demonstration (RD&D) budget, which is the primary
input of energy technology innovations on cleaner energy supply and carbon footprints (CFP). In this
study, a cleaner energy supply is measured as the contribution of renewable energy to total primary
energy supply (RE). We assumed that the effect of energy innovation is not uniform but varies according
to the descending and ascending movements in a government’s energy technology RD&D budget. To this
end, we distinguished the impact of the descending and ascending movements in government energy
technology RD&D budgets on cleaner energy supply, and CFP in Europe over the period 1985 to 2016.
Additionally, we carried out a comparative examination of the effects of energy technology RD&D expenditures
on RE and CFP under both linear and nonlinear panel techniques. To increase room for policy
implications, we also controlled for the role of economic growth and trade openness and performed
several robustness check analyses. We found that the reduction of carbon footprints associated with an
increase in public support to energy technology RD&D is more pronounced than the contribution of
energy technology innovation to the deployment of renewable energy in Europe. This study provided
little evidence in favor of the effectiveness of a government energy technology RD&D budget to substantially
boost renewable energy in Europe. Following these results, we suggest that the knowledge of
the asymmetric linkage between public energy technology innovation, RE, and CFP is a starting point to
achieve win-win solutions that favor clean energy and environmental sustainability.