The Interplay of Green Technology and Energy Consumption: A Study of China’s Carbon Neutrality and Sustainable Digital Economy

Abstract

In light of the carbon neutrality goals set post-Paris Climate Conference (COP21), this study delves into the relationship between green technology innovations, energy consumption, and CO2 emissions in China, spanning the period of 1990 to 2021. The objective of this paper is to creatively present the idea of a low-carbon digital economy from the viewpoint of digital technology. Utilizing the Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) model, we scrutinize this relationship, employing unit-root testing to verify the integrative attributes of the variables, inclusive of structural break data. Further analysis using the bootstrap Autoregressive Distributed Lag (ARDL) bound testing method corroborates the relationship between these key variables. The study reveals unidirectional co-integration over time among green technology innovations, renewable and non-renewable energy, per capita income, population, and CO2 emissions as per the Granger causality test. Interestingly, our findings suggest that while green technology innovation, per capita income, and renewable energy contribute to the reduction of CO2 emissions, non-renewable energy consumption and population growth exacerbate them. These insights offer valuable guidance for policymakers in formulating comprehensive strategies to enhance environmental quality through the promotion of renewable energy and green technology innovations, with a specific emphasis on the Chinese context.