The Innovation Paradox in the United States: Why AI Innovation Outperforms Green Technology in Driving Energy Efficiency

Authors

  • Eszter Lukács Széchenyi István University, Győr, Hungary.
  • Mohammad Fakhrul Islam Széchenyi István University, Győr, Hungary, Doctoral School of Economic and Regional Sciences, Hungarian University of Agriculture and Life Sciences (MATE), Gödöllő, Hungary. & College of Business Administration, International University of Business Agriculture and Technology, Dhaka, Bangladesh

Keywords:

Artificial Intelligence, Energy Efficiency, Green Innovation, Sustainability Policy, Innovation Paradox

Abstract

The United States energy sector exhibits an innovation paradox whereby considerable financial commitments to green technology innovation (GTI) have not translated into proportional gains in energy efficiency, notwithstanding the nation’s prominent position in green patent generation. This study evaluates the relative efficacy of artificial intelligence (AI) innovation compared with conventional GTI in advancing energy efficiency across the United States (U.S.) over the period 1990–2022. Employing autoregressive distributed lag (ARDL) bounds testing in conjunction with rolling window estimation techniques, the analysis assesses the respective impacts of GTI and AI innovation, while incorporating government intervention and the proportion of renewable electricity within the energy mix as control variables. The empirical findings identify a pronounced innovation paradox: AI-based innovation exerts a stronger and statistically significant effect on energy efficiency enhancement relative to traditional GTI. By delivering robust quantitative evidence on the comparative technological drivers of efficiency improvement, this study advances the expanding body of scholarship concerning the technology–environment interface. The results carry important implications for the formulation of sustainable development policies and the strategic prioritisation of innovation pathways.

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Published

2026-07-27

How to Cite

Eszter Lukács, & Mohammad Fakhrul Islam. (2026). The Innovation Paradox in the United States: Why AI Innovation Outperforms Green Technology in Driving Energy Efficiency. Decision Making: Applications in Management and Engineering, 9(1), 118–137. Retrieved from https://dmame-journal.org/index.php/dmame/article/view/1753

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Vol. 9 No. 1 (2026): Decision Making: Applications in Management and Engineering

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Regular articles

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