Green perspectives of finance, technology innovations, and energy consumption in restraining carbon emissions in China: Fresh insights from Wavelet approach

ABSTRACT

Carbon dioxide (CO₂) emission is a major contributor to global climate change and needs an instant reduction to preserve the environmental quality of the planet. To ensure this, our study examines the role of green factors in terms of finance, technology, and energy in reducing CO₂ emissions in China using quarterly data spanning 2001Q1-2020Q4. A recently developed frequency- and time-varying technique named “Wavelet Local Multiple Correlation” is applied to examine the impact of considered factors on CO₂ emission dynamics in short-, medium-, and long-term. Thus, our study is the first to provide detailed insights into the role of green factors in reducing CO₂ emission in China in a multivariate context. The outcomes confirm the long-term positive connectedness among green finance, green technology, and green energy consumption. Secondly, all these factors are asymmetrically and negatively correlated to CO₂ emissions in long-term frequencies. However, green energy and green finance are highly affecting the CO₂ in long-term, while green technology in medium-term. Finally, the multivariate analysis confirms that all the explanatory variables follow a similar trend in affecting CO₂ emission; though, green finance is the dominant factor in the correlation. Based on the findings, the study recommends promoting green innovations, financial measures, and renewable energy that help China to limit CO₂ emissions and promote environmental quality.

KEYWORDS:

• Green finance
• green technology innovations
• green energy
• environmental quality
• WLMC
• China

Abbreviation

BRICS	=	Brazil Russia, India, China and South Africa
CO2	=	Carbon emissions
GDP	=	Gross Domestic Product
GHG	=	Greenhouse Gas Emissions
GRFN	=	Green Finance
GRTN	=	Green technology innovations
GREN	=	Green energy
MINT	=	Mexico. Indonesia, Nigeria and Turkey
OECD	=	Organisation for Economic Co-operation and Development
SDG	=	Sustainable Development Goals
UN	=	United Nations

Disclosure statement

The authors certify that they have NO affiliations with or involvement in any organization or entity with any financial or non-financial interest in the subject matter or materials discussed in this manuscript.

Availability of data and materials

Data will be made available on request.

Consent for publication

The authors are willing to permit the Journal to publish the article.

Additional information

Funding

This research is funded by National Natural Science Foundation of China, Grant/Award Number: 72073082.