Effect of carbon emissions and the driving mechanism of economic growth target setting: An empirical study of provincial data in China

Abstract

As the largest developing country in the world, China is committed to promoting high-quality economic development, while maintaining necessary economic growth. Given the downward pressure on economic growth alongside the goal of achieving carbon peak and carbon neutrality, the scientific coordination of economic growth and carbon emissions is a vital consideration at local government level. Setting economic growth targets is an important element of economy management, one that also affects carbon emissions through factor allocation. This study analyzes the theoretical impact of setting economic growth targets based on carbon emissions, and conducts empirical research utilizing Chinese provincial-level panel data from 2000 to 2019. Accordingly, this study adopts the driving mechanism using mediating and moderating effect models. The economic growth target setting significantly reduced carbon emissions, and the study's result conclusively passed the robustness test. The carbon emission effect of the economic growth target setting has significant spatiotemporal heterogeneity. Setting economic growth targets affects carbon emissions by influencing industrial structure, factor mismatch, and innovative development. Moreover, the relationship between carbon emissions and economic growth targets is significantly regulated by government behavior and marketization levels. In future, optimizing the government's economic management behavior is an important measure for China to achieve the goals of carbon peak and carbon neutrality. For local governments, the focus is on formulating reasonable growth targets, promoting market-oriented reform, and accelerating innovation-driven transformation to achieve a high-quality synergy between economic growth and carbon emissions reduction. On the basis of enriching relevant research perspectives, this study provides empirical experience for understanding the carbon emission effects of economic management in the emerging countries, and the driving mechanism identification can provide reference for local governments to optimize economic management behavior.