Energy taxes, energy innovation, and green sustainability: empirical analysis from a China perspective

The idea that energy taxes and innovation may contribute to lowering greenhouse gas emissions and fostering the development of a more sustainable energy future is gaining popularity. Therefore, the study's main goal is to explore the asymmetric impact of energy taxes and innovation on CO2 emissions in China by employing linear and nonlinear ARDL econometric methods. The outcomes of the linear model demonstrate that long-term increases in energy taxes, energy technological innovation, and financial development cause CO2 emissions to reduce, while increases in economic development cause CO2 emissions to climb. Similarly, energy taxes and energy technological innovation cause CO2 emissions to fall in the short run, while financial development promotes CO2 emissions. On the other hand, in the nonlinear model, the positive energy changes, positive energy innovation changes, financial development, and human capital help reduce the long-run CO2 emissions, and economic development increase the CO2 emissions. In the short run, the positive energy and innovation changes are negatively and significantly connected to CO2 emissions, while financial development is positively linked to CO2 emissions. The negative energy innovation changes are insignificant in both the short and long run. Therefore, Chinese policymakers should try to promote energy taxes and innovations as tools to achieve green sustainability.