Do technological innovations and clean energies ensure CO2 reduction in China? A novel nonparametric causality-in-quantiles

Abstract

Sustainable manufacturing and green growth are prominent concerns for both advanced and emerging countries to reach the sustainable development goals. Most emerging economies rely heavily on fossil fuels to meet their energy needs, which increases greenhouse gas emissions and degrades environmental quality. This study accessed the role of renewable energy, trade globalization, and technological innovations in predicting environmental quality in China using quarterly data from 2001 to 2019. The study employed a novel nonparametric causality-in-quantiles approach, because causality may not exist in the mean, but a higher-order relationship may be observed in the variance. The outcomes revealed that renewable energy, globalization and technology, all have significant and asymmetric power to predict carbon emissions and ecological footprint in China. The main finding of the study is that technology seems to be the most significant predictor of carbon emissions, while the ecological footprint is highly driven by renewable energy. Based on these results, the Chinese government should reduce ecological degradation by increasing investments in technological progress and renewable energy to achieve sustainable development.