Exploring the role of green innovation and investment in energy for environmental quality: An empirical appraisal from provincial data of China

• Published in: Journal of environmental management Vol. 292; p. 112779
• Main Authors: Guo, Jiajia, Zhou, Yong, Ali, Shahid, Shahzad, Umer, Cui, Lianbiao
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 15.08.2021
• Subjects: carbon; carbon dioxide; Carbon neutrality; China; CO2 emissions; energy; energy industry; Energy Investments; environmental degradation; environmental Kuznets curve; environmental management; environmental quality; Green innovation; income; Low carbon economy; renewable energy sources; sustainable technology; China; Low carbon economy; Carbon neutrality; CO2 emissions; Energy Investments; Green innovation
• ISSN: 0301-4797; 1095-8630; 1095-8630
• DOI: 10.1016/j.jenvman.2021.112779

To better analyze China's carbon neutrality target, this study investigates the effect of green innovation and investment in the energy industry on China's provincial and regional data from 1995 to 2017. Using Westerlund and Edgerton's panel cointegration test, the authors found a stable long-run relationship between CO2 emissions and its determinants. We found that under major structural breaks at the local, regional, and global levels, such as the East Asian crises of 1997, the financial crises of 2007–2008, China's RMB exchange rate reform announced on August 11, 2015, and mild recession in 2001, CO2 emissions, income, green innovation, renewable energy use, and energy industry investment are cointegrated. The environmental Kuznets curve hypothesis is valid. In the long run, income, environmental innovation, investment in the energy industry, and renewable energy consumption are key contributors in explaining CO2 emissions. The empirical evidence from augmented mean group (AMG) is consistent with the estimates of CS-ARDL. Concerning practical implications, the findings suggest that there is a need to switch the Chinese economy to more sustainable sources of energy, a viable solution to abate environmental degradation. China should introduce and shift investments to green innovation. •We explore factors that help to achieve the carbon neutrality target of China.•The novel panel data econometric tools were used for empirical analysis.•It confirmed the existence of the EKC hypothesis for provincial data of China.•Investment in energy and technological innovation helps to reduce emissions.•Renewable energy consumption also helps to achieve zero emissions target.