Analysis of influencing factors of the carbon dioxide emissions in China's commercial department based on the STIRPAT model and ridge regression

Commercial department assumes the vital part in energy conservation and carbon dioxide emission mitigation of China. This paper applies the time-series data covering 2001-2015 and introduces the STIRPAT method to research the factors of commercial department's carbon dioxide emissions in China. The combination of STIRPAT method and ridge regression is first adopted to research carbon dioxide emissions of commercial department in China. Potential influencing factors of carbon dioxide emission, including economic growth, level of urbanization, aggregate population, energy intensity, energy structure and foreign direct investment, are selected to establish the extended stochastic impacts by regression on population, affluence and technology (STIRPAT) model, where ridge regression is adopted to eliminate multicollinearity. The estimation consequences show that all forces were positively related to carbon dioxide emissions in China's commercial department except for energy structure. Energy structure is the only negative factor and aggregate population is the maximal influencing factor of carbon dioxide emissions. The economic growth, urbanization level, energy intensity and foreign direct investment all positively contribute to carbon dioxide emissions of commercial department. The findings have significant implications for policy-makers to enact emission reduction policies in commercial sector. Therefore, the paper ought to take into full consideration these different impacts of above influencing factors to abate carbon dioxide emissions of commercial sector.