Do the asymmetric effects of technological innovation amidst renewable and nonrenewable energy make or mar carbon neutrality targets?

The unflinching surge in global warming has left the world in ecological chaos. Consequently, governments across the globe are committing to achieving decarbonizing the environment with a target aimed at 2050, of which China is a key player. In effect, this study seeks to contribute to the strides by querying the extent to which shocks in technological innovation make or mar the sustainability of the Chinese environment from 1990 to 2019. The other impacts of foreign direct investment, renewable and nonrenewable energy, and economic growth are considered in the model estimated through nonlinear ARDL robust for ascertaining instantaneous positive and negative effects. The results reveal that technological innovation promotes and hinders environmental sustainability based on the positive and negative shocks, respectively, whereas the adverse shocks impede it. Besides, economic growth and nonrenewable energy turn out to be negative predictors of environmental sustainability while renewable energy and FDI facilitate it. The results of the Fourier Toda Yamamoto corroborate the NARDL results. The EKC hypothesis is not validated for China based on estimates from the novel Itkonen (2012) approach. Following the empirical results, practicable policy insights toward sustaining the environment in China and beyond are formulated.

Automated summary

This study aims to explore the impact of technological innovation on the sustainability of the Chinese environment, considering the influences of foreign direct investment, renewable and nonrenewable energy, and economic growth. The results show that technological innovation has both promoting and hindering effects on environmental sustainability, while negative shocks impede it. Economic growth and nonrenewable energy are negative predictors of environmental sustainability, while renewable energy and FDI facilitate it.