Table of Contents
ABSTRACT
China is the largest carbon emitter globally. As a result, the nation faces significant challenges in balancing its economic growth with its commitment to carbon neutrality. Given the goal of the Chinese economy to reach net-zero emissions by 2060, the public-private partnership (PPP) has emerged as a viable investment plan in clean technology in China. However, the long-term relationship between clean technological innovation under the PPP while controlling for carbon emissions and economic growth remains unknown. This study uses a quantile co-integration and quantile-on-quantile regression (QQR) approach to understand this relationship. This study examined the determinants of China’s carbon emissions (CO₂) from 1992 to 2020, focusing on clean techno-environmental innovation (CTEC), economic globalization (EGLO), fossil fuel consumption (FF), public-private investment in energy (PPE), and economic growth of Gross Domestic Product (GDP). The methodology further addresses the nonlinear relationships and heterogeneity across distributional quantiles. Hence, the long-term co-integration between CO₂ and its determinants could be understood. The results reveal there is long-term co-integration between CO₂ and its determinants. Clean technology and PPE significantly reduce CO₂, with techno-environmental innovation exhibiting stronger effects at lower emission quantiles. Conversely, economic globalization and fossil fuel consumption exacerbate CO₂, particularly in high-emission quantiles. Economic growth consistently correlates with rising emissions, reflecting China’s developmental stage and prioritisation of industrialisation. Based on these findings, policy implications emphasise enhancing carbon trading mechanisms, accelerating low-carbon technology R&D, and regulating fossil fuel reliance. Regionally tailored strategies, such as optimising public-private partnerships and imposing CO₂ thresholds on foreign investments, would also be viable.
Keywords: China’s carbon emissions, determinants, co-integration test, clean technological innovation, public-private partnerships investment
