Green Investment, Digital Technological Progress, and the Dynamics of Carbon Emissions in China: A Review

Abstract

This article examines the impact of green capital allocation and improvement in information and communication technology on the trajectory of carbon emission from the period of 1985 to 2024 in China. Our results highlight the importance of environmentally sustainable investment and technological development of digital technologies to curb increasing carbon production, while at the same time emphasizing the possible paradox that accelerated economic growth will continue to increase environmental strain through a large increase in carbon emissions. Existing scholarship supports the linkages between the forms of green investment, technological innovation, and economic growth (including the dimension of nonlinear, quadratic growth) and thus can shed light on the dynamic interactions of these variables in the context of the environment. Inspired by these empirical understandings, policy prescriptions that attempt to crystallize a more solid path for China to move toward a cleaner and more sustainable growth paradigm have been proposed in the present work. Existing literature has found a strong connection among green investment, technological innovation and economic growth with the help of static and dynamic econometric methodologies. These outcome results provide important knowledge on the complex interrelations of environmental outcomes. Based on empirical literature, the current study proceeds with policy recommendations in order to guide conversion toward a cleaner and more sustainable pathway of economic growth in China. Foremost, such exclusive focus on China narrows the scope of generalizability of the findings, as well as salient cross-country comparisons. Further, key institutional dimensions, such as regulatory frameworks, mechanisms for environmental governance and administrative supervision, are not included explicitly in the analysis. Future research should therefore have a multi-country perspective, consider institutional and policy-related variables, apply more stringent robustness tests and make every effort to explain the complex interrelationships between economic activity, technological advance, and carbon emissions.