Does energy productivity and public-private investment in energy achieve carbon neutrality target of China?

Abstract

Carbon neutrality target is of great importance to all countries around the globe recently. Innovative methods are being evaluated to achieve the environmental sustainability. In this study, we aim to inspect the influence of public-private partnership in energy and energy efficiency on CO2 emissions in China from 1991Q1 to 2017Q4. In doing so, we include other important determinants of CO2 emissions also, such as environmental innovation, renewable energy, energy productivity and economic growth in our model. We employ the advanced cointegration methods that are developed recently. Moreover, spectral Breitung and Candelon (BC) causality test is used to find the causal effects of technological innovation, energy productivity, public-private partnership in energy, renewable energy consumption and GDP on CO2 emissions. The results suggest that increase in income and public-private partnership enhance carbon emission in China. Conversely, an improvement in energy productivity, renewable energy and technological innovation exert negative influence over CO2 emissions. There is a need to improve the efficiency of public-private partnership in energy projects in terms of carbon emission. Policymakers in China need to ensure an effective and timely transition towards renewable energy sources through environment related innovations and improved efficiency in all sources of energy.