Unraveling the nexus: China's economic policy uncertainty and carbon emission efficiency through advanced multivariate quantile-on-quantile regression analysis

Abstract

The pursuit of green economic development, coupled with the endeavor towards achieving dual carbon objectives, has opened new pathways for sustainable progress in China. Nevertheless, the realization of the Sustainable Development Goals is closely intertwined with economic policy fluctuations. In this context, our study investigates the influence of economic policy uncertainty on the efficiency of carbon emissions in China over the period from 2005 to 2021. We employ the Multivariate Quantile-on-Quantile (m-QQR) Regression approach to dissect the tail dependence of model parameters amidst this uncertainty. The findings highlight how China's carbon emission efficiency is influenced by exogenous factors, including GDP per capita, energy consumption intensity, green building integration, and international trade openness. Furthermore, the analysis reveals nuanced dependencies across various quantiles. By elucidating these dynamics, this research provides valuable insights aimed at guiding China toward its dual-carbon goals and promoting the growth of a sustainable green economy.