Towards carbon neutrality by improving carbon efficiency-A system-GMM dynamic panel analysis for 131 countries? carbon efficiency

Given that improving carbon emission efficiency is the cost-effective measure to achieve carbon peak and carbon neutrality, achieving carbon peak/neutrality with minimal economic costs demands a more comprehensive understanding of the factors affecting carbon emission efficiency. In this work, a dynamic panel data analysis with generalized method of moments (GMM) estimation was developed to investigate the effects of industrialization, and renewable energy on carbon emission efficiency, to uncover the interactive and influence channels among these influencing factors using 131 countries' panel data. The results show that: (i) although urbanization and population aging are not conducive to the improvement of carbon emission efficiency in higher-income countries, they are conducive to the improvement of carbon emission efficiency in lower-income countries. (ii) Trade openness in the global community will have a negative impact on carbon emission efficiency. However, trade openness plays a vital role in improving the carbon emission efficiency of high-income economies. (iii) The rise in renewable energy and industrialization has improved carbon emission efficiency, and the utilization and development of renewable energy in higher-income countries is generally higher than in lower-income countries, and the environmental governance system is relatively sound.

Automated summary

Improving carbon emission efficiency is a cost-effective measure to achieve carbon peak and carbon neutrality. Factors such as urbanization and population aging have different effects on carbon emission efficiency in low-income countries compared to high-income countries. Trade openness has a negative impact on carbon emission efficiency, but plays a vital role in high-income economies. The utilization and development of renewable energy and industrialization contribute to the improvement of carbon emission efficiency.