Low-carbon Innovation, Economic Growth and CO2 Emission: Evidence from a Dynamic Spatial Panel Approach in China

Abstract

Low-carbon technology innovation plays an essential role in carbon emission reduction worldwide. This study investigates how low-carbon innovation affects carbon emissions by the Dynamic Spatial Durbin Model based on the panel data of 30 Chinses provinces from 2007 to 2017. The empirical results show that: Firstly, low-carbon innovation decreases carbon emissions from local and neighbor, the decreasing effects are significant mainly in the short term. Secondly, the results of the heterogeneity test indicate that the weakening effect of low-carbon innovation in central regions is consistent with the national results. The weakening effects are shown in long-term indirect and short-term direct in eastern regions. Thirdly, there is an inverted-U curve between economic development and carbon emissions, confirming the environmental Kuznets curve (EKC) hypothesis. However, the inflection point is insurmountable under the current level of technology in China. Finally, The results also show the “Pollution Paradise” effect.

High-quality economic development, green credit and carbon emissions

“…Using data on six countries in southeast Asian financial markets, foreign direct investment, and openness to trade impact on carbon dioxide emission, Mahmood et al (2018b) proved that the six countries have significant spatial spillover effect, and also confirmed financial markets, foreign direct investment, and trade openness will increase emissions. Zhang et al (2021) confirmed the "inverted U-shaped" relationship between economic development and carbon emissions through the dynamic spatial model, which is in line with the environmental Kuznets curve (EKC) hypothesis. Mahmood et al (2021) studied the effects of economic development, urbanization and foot-and-mouth disease on oil consumption and national geographic characteristics in Middle Eastern countries, and confirmed the existence of the environmental Kuznets hypothesis.…”