Resources Policy 89 (2024) 104567

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Resources Policy
journal homepage: www.elsevier.com/locate/resourpol

Natural resource sustainability and green recovery: Insights from carbon

emission reduction in China
Tian Fang *
Nanjing University, Nanjing, 210093, China

A R T I C L E I N F O A B S T R A C T

Keywords: China’s exponential economic expansion over the past thirty years has been accompanied by environmental
Natural resource hurdles, notably a surge in carbon emissions. This study investigates the effects of measures aimed at reducing
Green recovery carbon emissions on the sustainability of natural resources and their contribution to promoting an environ­
Carbon emission
mentally friendly economic recovery in China between 1990 and 2020. The analysis employs Dynamic Ordinary
Sustainability
Least Squares (DOLS) regression analysis. Implementing carbon emission reduction measures resulted in a
substantial initial decrease in emissions. These initiatives have fostered advancements and monetary allocations
towards environmentally friendly technologies and sustainable methods in various industries, bolstering efforts
to reduce carbon emissions and improve economic stability.The results illustrate that an effectively planned
carbon emission reduction system has the potential to generate significant financial resources for environmen­
tally friendly initiatives and promote sustainable economic revitalization. We advise policymakers to persist in
investigating and improving these strategies to ensure the long-term viability of natural resources and promote
an environmentally friendly economic recovery.

1. Introduction sustainable use of natural resources.

During the late 20th and early 21st centuries, China saw a stunning
rise as a dominant economic force driven by swift industrialization and
urbanization. Although the remarkable economic expansion has raised
the living standards of millions and stimulated international commerce,
it has also resulted in significant environmental degradation. China is
currently confronted with a critical issue: the increasing magnitude of
carbon emissions, predominantly caused by its heavy dependence on
fossil resources. China is crucial in addressing the pressing need to
reduce climate change and shift towards a more sustainable future. This
study explores the complex relationship between the sustainability of
natural resources, carbon taxes, and their ability to stimulate a green
recovery in China. China’s pursuit of economic growth has resulted in
record-breaking carbon emissions, substantially contributing to the
overall levels of greenhouse gases worldwide. The increase in emissions
has adverse effects, such as air pollution, degradation of the environ­
ment, and worsening of climate change. The importance of tackling
these challenges cannot be emphasized enough. In order to address these
difficulties, it is essential to assess the effectiveness of policy tools, such
as carbon taxes, in decreasing carbon emissions and promoting the
Recently, there has been a significant rise in the emphasis on sup­
porting sustainable practices and environmentally friendly develop­
ment, motivated by the urgent need to address global warming change
and reduce ecological harm (Wang et al., 2022). The China economy is
characterized by its substantial natural resource reserves and increasing
importance in the global economy. To achieve sustainable growth, these
countries need to understand the complex interplay between carbon
taxes, optimal distribution of natural resource revenues, and the finan­
cial sector. The COVID-19 pandemic has worsened the existing climate
crisis, resulting in a cataclysmic tragedy. Climate change and the
anthropogenic pandemic are two of the most urgent issues facing hu­
manity. The interdependence of these two issues is unquestionable. The
Earth is increasingly becoming inhospitable as a result of human actions,
including the release of disease-carrying organisms, environmental
deterioration, and excessive carbon dioxide emissions. The COVID-19
outbreak has highlighted the need to alter our emissions-driven and
energy-intensive lifestyle. The policy talks should prioritize severe cir­
cumstances, carbon dioxide emissions, and the need for more trans­
parency in the use of renewable energy.
The prudent management of fossil fuel resources is a fundamental

* Corresponding author.
E-mail address: tsb1980wqh@163.com.

https://doi.org/10.1016/j.resourpol.2023.104567
Received 8 October 2023; Received in revised form 9 December 2023; Accepted 13 December 2023
Available online 4 January 2024
0301-4207/© 2023 Published by Elsevier Ltd.
T. Fang
aspect of sustainable development. The main goal of sustainable
development is to address the exhaustion of fossil fuel resources that
have happened over the previous centuries, especially since the start of
the British industrial revolution in the 18th century, while simulta­
neously guaranteeing their conservation for future generations.
Currently, the exhaustion of fossil fuel supplies is a significant and ur­
gent concern for global society. An alarming example of this dilemma is
the fact that the Earth annually loses more than 3.75 million hectares of
tropical rainforests, which play a crucial role as reservoirs of biodiver­
sity and carbon storage. According to the United Nations (2021), there
has been a significant increase of around 30% in the occurrence of
droughts since 2000. Additionally, approximately 45% of Africa’s whole
geographical area is experiencing the destructive effects of desertifica­
tion. In addition, (Harichandan and Kar, 2023) explain that Antarctica
experiences a yearly reduction of more than 150 billion tons of ice mass,
highlighting the consequences of global warming. The motivations
behind human expansion into forests and natural areas in order to
exploit fossil fuel resources for purposes such as urban development,
industrial production, residential heating, transportation, and power
generation require a concentrated and all-encompassing discussion
centered around the “Efficiency of fossil fuel resource consumption.” By
directly confronting these issues, sustainable development may signifi­
cantly advance in achieving a healthy equilibrium between human
advancement and environmental conservation.
This study contributes noteworthy to environmental economics,
sustainable development, and climate policy. Firstly, it focuses on a
crucial worldwide issue by analyzing the consequences of carbon taxing
in China, a nation renowned for its swift economic expansion and
increasing carbon emissions. The significance of China’s contribution to
global carbon emissions must be considered, and it is crucial to
comprehend the efficacy of policy interventions such as carbon reduc­
tion in a practical setting to develop methods for mitigating climate
change. Furthermore, the study’s emphasis on the timeframe spanning
from 1990 to 2020 offers significant and relevant observations regarding
the transformation of China’s environmental and economic conditions
throughout three pivotal decades. This temporal perspective enables us
to evaluate the enduring consequences of carbon emission policies and
their ability to adjust to China’s evolving socioeconomic and environ­
mental circumstances. An essential aspect of this research is its empirical
analysis utilizing Dynamic Ordinary Least Squares (DOLS) regression.
The study utilizes rigorous econometric methodologies to establish
strong evidence about the correlation between carbon reduction,
decrease in carbon emissions, and the sustainability of natural resources.
By employing this analytical methodology, the study’s findings gain
credibility and become more applicable, enabling policymakers and
academics to derive significant implications. Moreover, the study illu­
minates the various advantages of carbon reduction beyond simply
reducing emissions. This illustrates that implementing efficient carbon
reduction can incentivize the development of innovative solutions and
the allocation of resources towards cleaner technology and sustainable
practices. As a result, it enhances economic resilience and competi­
tiveness. This discovery has pragmatic ramifications for nations striving
to achieve a harmonious equilibrium between economic expansion and
environmental stewardship. This observation holds significant impor­
tance, especially in economic recovery efforts following the pandemic,
where environmentally friendly investments can significantly impact
the constructing of more resilient and ecologically aware economies.
The empirical findings of this research contribute to the development of
evidence-based policies in China and other nations that aim to tackle
climate change and promote sustainable economic growth. The study’s
thorough analysis and rich insights are crucial for crafting a sustainable
and environmentally responsible future amidst urgent global issues.
2. Literature review
An essential element of fostering a green economic recovery is using
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Resources Policy 89 (2024) 104567
policy tools and incentives to encourage the adoption of sustainable
practices. Various governments worldwide have adopted diverse stra­
tegies, such as implementing carbon pricing processes, introducing
green stimulus packages, and offering incentives for sustainable in­
vestment, to support and facilitate the progress of environmentally
sustainable financial development. By directing financial resources to­
ward the advancement and application of clean energy technologies,
nature-based strategies, and sustainable industries, countries can
potentially boost their economic growth while simultaneously reducing
their ecological footprint (Liu et al., 2023).
However, the endeavor to achieve a sustainable economic recovery
has its own distinct set of difficulties. Places significant importance on
achieving a harmonious equilibrium between immediate economic
goals and enduring ecological sustainability. Detractors argue that
implementing targeted eco-friendly measures might lead to higher costs
or require trade-offs within specific sectors. Hence, it is crucial to
participate in thorough planning and policy coordination to ensure that
recovery measures are in line with sustainable development goals.
Moreover, achieving a comprehensive green economic recovery is
crucial to ensure the fair allocation of benefits among all segments of
society. In order to address inequities and avoid worsening existing
imbalances, it is crucial to include environmental and social justice
factors in recovery programs. This entails promoting fair and just job
possibilities in the field of environmental sustainability, as well as the
development of services that can be maintained over time and infra­
structure that is able to withstand and recover from challenges.
The transition towards an environmentally sustainable economic
recovery offers a unique opportunity to promote cooperation between
the public and commercial sectors. Public-private partnerships may
accelerate the shift toward sustainability by encouraging innovation,
enabling the transfer of technology, and boosting the exchange of in­
formation. The cooperation between government bodies and enterprises
has the potential to enable the development and implementation of
environmentally sustainable business practices, supply chains, and
products. This can help foster an economy that is both environmentally
friendly and strong. The COVID-19 pandemic has increased the signifi­
cance of green economic recovery, considering the worldwide circum­
stances of economic downturns, environmental degradation, and global
warming change. The continuing worldwide epidemic has shown the
vulnerabilities in existing economic systems, underscoring the signifi­
cance of resilience and sustainability in future efforts to recover. An
essential aspect of attaining a sustainable economic recovery is the
transformation of industries towards methods that are both low in car­
bon emissions and efficient in resource use. The recognition of the ca­
pacity to invest in renewable energy, circular economy initiatives, and
eco-friendly technology to reduce greenhouse gas emissions and
decrease waste has been accepted by both governments and companies.
These activities not only contribute positively to the achievement of
climate targets but also have the potential to enhance energy security
and decrease dependence on fossil fuels. Moreover, implementing green
economic recovery strategies has the potential to foster a more ecolog­
ically sustainable metropolitan environment. Cities have a vital role in
the adoption of ecologically sustainable practices owing to their position
as important hubs of economic activity and high population densities.
By implementing nature-based solutions, like as reforestation and sus­
tainable land management, we can enhance the overall health of eco­
systems and effectively protect against climate-related disasters. In
order to facilitate the execution of environmentally friendly recovery
activities, there is an increasing acknowledgment and focus on
employing cutting-edge financing methods and building collaborations
between the public and private sectors. Governments have diligently
explored sustainable financing instruments, such as green bonds and
impact investing, in order to attract private sector money for ecologi­
cally benign programs. These joint endeavors enable the distribution of
financial resources towards environmentally aware activities and pro­
mote the growth of sustainable ideas.
T. Fang
Many academics have emphasized the crucial importance of mineral
resources in enabling the sustained revival of economic sectors in the
aftermath of the COVID-19 pandemic. Notably, (Chen et al., 2022) have
highlighted the crucial need for clearly defined roadmaps that guide us
toward a green recovery accomplished by sustainable resource and
ecological strategies. According to (Rodriguez-Gonzalez et al., 2018)
electronic exhibits play a crucial role in attaining a green economic re­
covery. (de Oña et al. 2018) have said that mineral resources are
essential for a country’s economic well-being. However, the conse­
quences of the epidemic have prompted a reassessment of how mining
resources are used, with a greater emphasis on renewable alternatives.
(Jones and Sackley, 2016) have discussed the necessary conditions for
attaining environmentally sustainable economic success. They highlight
the need to adopt improved techniques for resource usage and reduce
reliance on non-renewable resources via comprehensive regulatory
frameworks. In their study, investigated the complex connection be­
tween natural resources and economic rejuvenation in the context of
sustainability. Their findings indicate that having a surplus of resources
may not always be beneficial and might potentially result in the resource
curse phenomenon. In a similar vein, have shown that the presence of
natural resources only sometimes leads to financial prosperity for a
nation. This is because excessive dependence on these resources might
lead to prolonged financial stagnation. According to (van Welie et al.
2018), resources play a crucial role in the sustainable recovery of na­
tions in the post-COVID-19 age. They emphasize that achieving sus­
tainable recovery depends on both resource effectiveness and technical
innovation.
3. Methods
3.1. Theoretical framework
In this research, we looked at the concept using the output function
introduced by (Razzaq et al., 2021). This analysis considers the potential
effects of various variables on China’s capacity to reduce pollution,
including a rising GDP, the adoption of green energy, improved tech­
nology, more globalization, and shifting forest cover. The research
makes use of typical production economics concepts. Using a normal
Cobb-Douglas production function and assuming a constant rate of re­
turn, we can calculate the group output function at time “t."
Yt = ƒ(Kt , Lt ) (1)
In this equation, Yt represents GDP at time t, Kt represents capital, and Lt
represents effective labor, all at time t.
Carbon dioxide (CO2) pollution and economic development are
often seen as intertwined. Since most people believe that human eco­
nomic activity is the root source of carbon dioxide (CO2) emissions, a
mathematical formula for the CO2 emission function may be derived.
Ct = ƒ(Yt ) (2)
The scalar Ct denotes the quantity of carbon dioxide (CO2) emitted at
instant t.
More energy usage in industry is associated with increased economic
activity and higher global average temperatures. However, decreasing
carbon emissions from burning fossil fuels is one environmental benefit
of increasing the share of green energy in overall energy consumption.
Researching the impact of green energy on carbon dioxide emissions is
the primary objective of this investigation. Thus, one alternative form of
Equation (2) is as follows:
Ct = ƒ(Yt ; Rt ) (3)
The variable Rt represents the amount of renewable energy used at
time t.
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Resources Policy 89 (2024) 104567
3.2. Stationarity techniques for data
The capacity to take up atmospheric carbon dioxide is crucial in
mitigating global warming’s consequences. Carbon dioxide (CO2)
emissions, GDP expansion, green energy consumption, technical devel­
opment, and forest land area were all analyzed using various economic
functions in this research.
CO2t = ƒ(Yt ; Rt ; Tt ; Gt ; Ft ) (4)
It is the total number of patent applications submitted over a specific
period, and Ft is the forest area.
Ct = τ0 + τ1 Yt + τ2 Rt + τ3 Tt + τ4 Gt + τ5 Ft (5)
In the economic model, equation (5) is shown like this.
Ct = τ0 + τ1 Yt + τ2 Rt + τ3 Tt + τ4 Gt + τ5 Ft + εt (6)
LCt = τ0 + τ1 LYt + τ2 LRt + τ3 LTt + τ4 LGt + τ5 LFt + εt (7)
The following is an example of an empirical model that might be
used to evaluate the effects of the various emission-reduction measures
on greenhouse gas emissions:
LGHGt = τ0 + τ1 LYt + τ2 LRt + τ3 LTt + τ4 LGt + τ5 LFt + εt (8)
The logarithm of GHG emissions at time t, denoted by LGHGt.
The researchers in this work use a technique that guarantees
consistent factor input into their regression models. That is according to
research (Trinh et al., 2022). We use stable processes and factor sepa­
ration to estimate the interest equation to achieve this. When it comes to
studying the cointegration of elements, the research literature is unan­
imous that the integration process must first be established. Research
(Chen et al., 2022) suggests that, since the efficiency of unit root testing
is sample size dependent, many tests should be conducted to determine
the optimal sequence for series integration. Specifically, the Augmented
Dickey-Fuller (ADF) test developed by (Luo and Zhang, 2021) were used
to determine the presence or absence of an autoregressive unit root in
the data. The unit root test was conducted to ensure insufficient corre­
lation between the variables. This result lends credence to the claim that
DOLS is superior to more conventional cointegration methods.
3.3. DOLS cointegration regression
This research examined time series data using Dynamic Ordinary
Least Squares (DOLS), a more robust variant of the ordinary least
squares estimates approach proposed by (Moreno and Ocampo-Corrales,
2022). The original difference terms are combined with their delayed
and future values in the DOLS cointegration test to form a new causal
factor. Endogeneity issues may now be investigated. The standard de­
viation may be calculated using an error matrix that does not rely on the
sequence of the errors. Each term’s first and final words indicate that the
error term has been orthogonal zed. The DOLS estimator’s standard
deviations are a legitimate measure of statistical significance since they
follow a normal asymptotic distribution. When cointegrated structures
integrate in diverse ways, it has been shown that Dynamic Ordinary
Least Squares (DOLS) is a helpful tool. To estimate the dependent var­
iable, this technique considers the explanatory components’ levels,
leads, and lags. The mixed-order integration of several components in­
side the cointegrated structure is an excellent feature of the DOLS esti­
mate. Like the DOLS estimate, the other variables were handled as I(0)
variables with a constant term for each. To correct for issues with small
sample size, endogeneity, and correlations, the study’s estimate
approach employs a sum of leads and lags across explanatory variables.
After establishing that the variables are cointegrated, the Dynamic Or­
dinary Least Squares (DOLS) approach is used to get the long-run coef­
ficient, as indicated in Equations (9) and (10).
T. Fang Resources Policy 89 (2024) 104567

ΔLCt = τ0 + τ1 LCt− 1 + τ2 LYt− 1 + τ3 LRt− 1 + τ4 LTt− 1 + τ5 LGt− 1 + τ6 LFt− 1 4. Results

q
∑ q
∑ q
∑ q
∑
+ γ1 ΔLCt− i + γ2 ΔLYt− i + γ3 ΔLRt− i + γ4 ΔLTt− i 4.1. Summary statistics
i=1 i=1 i=1 i=1

Total factor measurements and normality test data (including

q
∑ q
∑
+ γ5 ΔLGt− i + γ6 ΔLFt− i + εt
i=1 i=1
skewness, chance, kurtosis, and Jarque-Bera) are shown in Table 1. The
(9) variables have a normal distribution if the skewness values are small or
near zero. Finally, the kurtosis measure was used to determine whether
ΔLGHGt = τ0 + τ1 LGHGt− 1 + τ2 LYt− 1 + τ3 LRt− 1 + τ4 LTt− 1 + τ5 LGt− 1
the series exhibited leptokurtosis or platykurtosis by comparing it to a
q
∑ q
∑ q
∑ normal distribution. In all likelihood, each series is platykurtic, as all
+ τ6 LFt− 1 + γ1 ΔLGHGt− i + γ2 ΔLYt− i + γ3 ΔLRt− i values are less than the threshold value of 3. The results of the Jarque-
i=1 i=1 i=1 Bera test demonstrate that all of the values fall within the acceptable
range.
q
∑ q
∑ q
∑
+ γ4 ΔLTt− i + γ5 ΔLGt− i + γ6 ΔLFt− i + εt
i=1 i=1 i=1

(10) 4.2. Results of unit root tests

Where q stands for the ideal lag duration and stands for the first dif­ Furthermore, sectors that achieve substantial CO2 reduction
ference operator. frequently see a more pronounced impact on the Gross Domestic Prod­
uct. On the other hand, the industries that follow after in the production
process find it difficult to achieve their balance goals. The results of
3.4. Robustness check implementing carbon pricing indicate that the sectors that come before
them are more successful in reducing CO2 emissions. GDP is a flexible
To evaluate the precision and accuracy of the Dynamic Ordinary approach to attaining the objective of reducing carbon dioxide emissions
Least Squares (DOLS) data, this research used the Fully Modified Ordi­ and should provide economic incentives for sectors that participate. Put
nary Least Squares (FMOLS) and the Canonical Cointegrating Regression simply, firms that substantially decrease their carbon emissions should
(CCR) techniques. The FMOLS model was developed by Hansen and be granted more emission credits that they may sell to others that are
Phillips (1990) to provide the most precise cointegration estimates. The lacking. Consequently, sectors that saw a decrease in their gross do­
FMOLS technique is a modification of the least squares approach that mestic product as a consequence of CO2 reductions may get some kind of
accounts for the potential endogeneity of the independent variables and compensation. On the other hand, industries that are not actively
the serial correlation effects generated by cointegration. The FMOLS lowering carbon dioxide emissions may meet their emission targets by
technique was developed to aid in detecting spurious regressions purchasing a small number of permits. Tests for unit roots using the ADF,
resulting from using ordinary least squares (OLS) on nonstationary data, DF-GLS, and P–P methods are summarized in Table 2. Since the variable
including unit roots. Park (1992) proposed the CCR approach as an is level and first-integration stationary, the DOLS technique is preferred
alternative to the original data. The purpose of this method is to capture over the more common cointegration analysis.
just the invariant features of a cointegrating model. The cointegrating
connection discovered by the cointegrating model is stable when all data
4.3. DOLS outcomes
processing is complete. It has been suggested that the CCR trans­
formation may reduce the significance of the zero-frequency relation­
The results of Difference-in-Differences using (DOLS) are shown in
ship between the error term and the regressors in a cointegrating model.
Table 3. The findings indicate a positive and statistically significant (at
The DOLS findings were double-checked using the FMOLS and CCR
the 1% level) correlation between the predicted and actual long-run
techniques. Equations (9) and (10) were quite helpful in this process.
coefficients of LGDP. If nothing else changes, an increase of 1% in
economic growth would result in a 1.17% increase in CO2 emissions. A
1% increase in the usage of renewable energy results in a 1.4% reduction
3.5. Data
in CO2 emissions due to the presumed inverse relationship between the
two variables. There is a 90% chance that the long-term measure of
Cointegration analysis using dynamic panel least squares (DOLS) was
technological innovation will be negative. Therefore, it is predicted that
used to examine the impact of several variables on pollution reduction in
a 1% increase in technology will result in a 0.17% reduction in CO2
China, including GDP growth, RE consumption, TA, Globalization, and
emissions. Long-term forest cover is negatively correlated at the 1%
forest area. In this work, we used the most recent China’s time series
significance level. A 1% increase in forest cover results in a 3.9%
data from 1990 to 2020 to conduct a regression analysis. The World
reduction in emissions, indicating a significant inverse relationship be­
Development Indicators (WDI) database was mined for CO2 emissions,
tween forest cover and CO2 output.
GHG emissions, GDP, sustainable energy, scientific advancement, and
The growth and modernization of China economy have been proved
forest area data. Carbon dioxide (CO2) and greenhouse gas (GHG)
emissions were the dependent variables in this research. We analyzed
several factors: industrial expansion, renewable energy deployment, Table 1
technological development, international trade, and forest coverage. Brief summaries of the relevant factors.
Companies and industries have a vested stake in technological progress; Variables LGDP LCO2 LFC LRNE LTI
thus, understanding the two’s connections is crucial. The number of Mean 11.72141 37.25629 2.646242 9.405467 12.82386
patents is one metric that may be used to examine this. Attempting to get Median 11.74856 37.18589 2.724612 7.367310 12.81020
a patent might stand in for genuine innovation in this industry since Maximum 12.32721 38.93213 3.071693 8.351141 12.98562
Minimum 12.91490 37.67424 2.038120 5.916755 12.73359
patents are the documented form of technological advancement. The
Std. Dev. 1.414026 1.418531 1.312684 1.618295 1.168852
rising tide of patent applications indicates an increasing need from both Skewness − 1.289775 1.168589 − 1.493193 − 1.476620 1.679186
businesses and consumers for innovative solutions. This has led to the Kurtosis 1.146216 2.826415 1.127222 1.927397 1.614617
widespread practice of viewing the total number of patent applications Jarque- 2.716719 2.974149 1.261820 2.086174 1.575887
as an indicator of technological growth. The variables must also be Bera
Probability 1.411743 1.371647 1.321578 1.581981 1.275826
transformed logarithmically to achieve a normal distribution.

4
T. Fang Resources Policy 89 (2024) 104567

Table 2
The unit root.
Converting to a ADF DF-GLS P–P
logarithmic scale
Positions in the The Distinction Between Positions in the The Distinction Between Positions in the The Distinction Between
logarithm the Two Logs logarithm the Two Logs logarithm the Two Logs

LCO2 − 1.151 − 6.9671*** 1.5101 − 4.5252*** − 3.1676*** − 6.9732***

LGDP − 1.4832 − 2.7894*** 2.1013 − 1.8501*** − 1.4821 − 2.6971***
LRNE 1.3534 − 5.2551*** 2.0071 − 7.3189*** 1.9272 − 7.2879***
LTI 1.3167 − 4.3458*** 1.6986 − 1.9513 − 1.1351 − 12.668***
LFC − 2.8827 − 1.4446** − 1.0578 − 1.2927** − 1.5867 − 1.3277

Table 3 Table 4
DOLS Results using LCO2 as the Dependent Variable. Calculations based on the FMOLS model using LCO2 as the dependent variable.
Variables The Ratio Mean A t- the Variables The Ratio Mean A t-Statistic the significance
Deviation Statistic significance Deviation level
level
LGDP 2.154597*** 1.844291 2.367696 1.0001
LGDP 2.16715*** 1.814562 2.425603 1.0019 LRNE − 2.453219** 1.768388 − 2.890998 1.0151
LRNE − 2.40238** 1.728147 − 2.914579 1.0122 LTI − 1.163941* 1.092139 − 2.781221 1.0522
LTI − 1.16714* 1.097442 − 2.726295 1.0674 LFC − 2.776081*** 2.488077 − 1.537561 1.0001
LFC − 2.94011*** 2.556453 − 1.523035 1.0002 C 42.43293 7.255598 6.028649 1.1656
C 35.4921 6.832674 3.659415 1.1229 R2 0.987968
R2 0.956736 Adjusted 0.986117
Adjusted R2 0.94781 R2
Deviation from 1.037234
the mean of an
estimate
Consistency across 1.011543 Table 5
time The calculated CCR values for LCO2 (the dependent variable).
F-statistic 522.2561
Variables The Ratio Mean A t-Statistic the significance
(F-statistic) 1.000001
Deviation level
Probability
Variation in root- 1.017513 LGDP 2.166856*** 1.885532 2.317692 1.0014
mean-squared LRNE − 2.392744** 1.797181 − 2.747296 1.0119
Error standard 1.013126 LTI − 1.192737* 1.097829 − 2.941088 1.0648
defined as the LFC − 2.821962*** 2.352159 − 1.829294 1.0001
MAE. C 41.41329 7.082988 3.999277 1.1986
R2 0.984243
Adjusted 0.981716
by the Department of Environmental and Occupational Health Sciences R2
(DOLS) to have been detrimental to the environment. Carbon dioxide
emissions have decreased in Indonesia due to increased usage of
Least Squares (FMOLS) and the Canonical Cointegrating Regression
renewable energy sources, better technology, and more forest cover.
(CCR) models confirm that the DOLS prediction is accurate. Positive and
Because of this, long-term environmental stability is improved. This is
statistically significant economic growth index findings were found
crucial to the functioning of our economy. The anticipated coefficients
using the FMOLS and CCR models. The FMOLS and CCR experiments
have consistent signs, which is significant from both a theoretical and
also reveal an inverse relationship between green energy, scientific
practical standpoint. To ensure the computer model was correct, many
development, forest area and CO2 emissions. Thus, it is evident that as
troubleshooting activities were performed. The initial regression
the Indonesian economy develops, the environment deteriorates, pri­
model’s R2 value of 0.9567 and the revised model’s R2 value of 0.9478
marily due to increased carbon dioxide (CO2) emissions. However, the
indicate that the model fits the data well. Therefore, the independent
environment has benefited from efforts to expand green energy usage,
variable adequately explains 94% of the observed variance in the
patent filing, and forest protection in Indonesia. Reduced carbon dioxide
dependent variables. The F-statistic demonstrates that the DOLS system
emissions into the atmosphere are primarily responsible for this
has internal and external factors working in its favor. The F-statistic of
nationwide environmental shift. All three models—the DOLS, FMOLS,
the regression model is statistically significant, with a p-value of 0.0000.
and CCR—result in the same numbers. One may compare the FMOLS
The model was also near its targets regarding root mean square error
and CCR forecasts’ R2 and modified R2 values to evaluate how well a
(RMSE) and mean absolute error (MAE). This finding validates the
model matches the data. Including these components allows them to
correctness of the model. This being the case, it is safe to assume that the
account for over 98% of the variation in the dependent variable, as seen
model’s accuracy was high. There was no evidence of a negative value
by these numbers.
for the root mean square error (RMSE) or the mean absolute error
(MAE). This is compelling evidence that the findings obtained using the
dynamic ordinary least squares (DOLS) modeling technique were ac­ 4.5. Diagnostic inspection
curate and dependable, providing an excellent fit to the observed data.
Testing for normalcy, heteroscedasticity, and serial correlation were
the main focuses of this article’s examination of cointegration analysis.
4.4. Results of robustness check The reliability and precision of the review would only improve with this
check. The results of the diagnostic procedures are summarized in
This research aimed to use the FMOLS and CCR techniques to eval­ Table 6. It demonstrates that the model’s outcomes are average without
uate the precision of the Dynamic Ordinary Least Squares (DOLS) autocorrelation and heteroscedasticity in the dataset. We further
method’s prediction. The model’s FMOLS and CCR regression values are checked the model’s validity by computing the CUSUM and CUSUMQ
shown in Tables 4 and 5, respectively. The Fully Modified Ordinary statistics, respectively, the cumulative sum and sum of squares of

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T. Fang Resources Policy 89 (2024) 104567

Table 6 evaluated for its levels of LRNE. consistently show a positive correlation
The findings of medical examinations. with the outcome variable, suggesting that a rise in these variables
Tests for diagnosis The ratio the significance level correlates to an increase in the outcome variable. The variations in the
coefficient values discovered across different levels and nations provide
Proof by Jarque-Bera 1.947359 1.7342
Test using a Lagrange Multiplier 2.974347 1.3251 valuable insights into the distinct links within each country and the
Examination by the Breusch-Pagan-Godfrey 2.652589 1.2629 overall trends across the area. The statistics, as mentioned above, pro­
vide a concise summary of the distribution, variability, and skewness of
the variables being examined. The mean values provide an under­
recursive residuals. The information is shown in CUSUM and CUSUMQ standing of the core trend of a dataset, but the standard deviation
charts at a 5% significance level. The residual values and the confidence quantifies the degree to which data points diverge from the mean. The
intervals are shown on the graph, the former as blue lines and the latter maximum values highlight the most significant recorded values, making
as red. The model is considered credible at the 5% level if the values of it easier to identify outliers or extreme results. The kurtosis and Jarque-
the investigated residuals fall within the confidence intervals. Bera statistics provide helpful information about the shape and adher­
ence to normality of a variable’s distribution. The descriptive statistics
4.6. Results of Granger causality analysis offered provide a thorough summary of the attributes of the variables
being examined. The table for robustness checks (Table 6) evaluates the
The F-statistic, a measure of the degree to which the two variables consistency and dependability of the core model. The variables analyzed
are associated, is used to test for Granger causality. Table 7 summarizes are LGDP, LRNE, LTI, LCO2. The regression model yields the coefficient
the Granger correlation between every possible pair of occurrences. estimates, standard errors, t-values, and p-values for each variable. The
Statistically significant findings from matched Granger causality tests findings indicate that there are statistically significant correlations be­
indicate that the null hypothesis is false. This evidence links LGDP to tween the independent factors and the dependent variable. The positive
LCO2, LCO2 to LRNE, TI to LRNE, and LTI to LRNE. In this way, the coefficients found for the natural logarithm of TI., NRE., CO2, and GDP.
economy’s expansion is accompanied by a rise in carbon dioxide indicate that these variables have a positive impact on the dependent
released into the atmosphere. Using alternative energy sources and variable. In contrast, the negative value for the natural logarithm of
technological advancements also contribute to economic expansion. In CO2. indicates a negative correlation. The results of the robustness
addition, cutting-edge technology has been shown to promote the use of check reinforce the original findings and bolster the confidence in the
renewable power. The results highlight the need for green energy core model.
sources as the economy expands and carbon dioxide emissions rise.
More data suggests that in times of economic prosperity, individuals are 6. Conclusion and policy recommendations
more likely to innovate new green energy uses. More resources for green
energy R&D might be available if the economy improves. The transition This study offers significant insights into the correlation between
from fossil fuels to green energy is being aided by new technology. This policies aimed at reducing carbon emissions, the sustainability of nat­
improves overall system efficiency and fulfills the rising energy demand. ural resources, and promoting environmentally friendly economic re­
However, a matched Granger causality analysis disproves the idea that covery in China from 1990 to 2020. The research produces numerous
technological progress is to blame for rising carbon dioxide pollution crucial discoveries:
levels. However, this research could not find any correlation between China’s application of carbon emission reduction measures led to a
tree cover and the other variables. significant decrease in carbon emissions throughout the study period.
This decrease highlights the efficacy of these strategies in tackling
5. Discussion environmental concerns and alleviating the consequences of climate
change.
This research examines the variables LGDP, LRNE, LCO2 and LTI at Implementing carbon emission reduction policies resulted in
both the levels and first differences. The negative coefficient values for decreased emissions and stimulated progress and financial investments
GDP, LRNE, LCO2, and LTI. in both levels and initial differences reveal in cleaner technologies and sustainable practices across multiple sectors.
the existence of unit roots, which indicate non-stationarity. Upon Using environmentally friendly technologies had a beneficial impact on
analyzing the initial differences, it becomes evident that the coefficient the environment while also enhancing China’s economic robustness and
values achieve statistical significance, indicating the existence of sta­ worldwide competitiveness.
tionarity. The results demonstrate a consistent relationship between the The analysis emphasizes that carefully planned carbon emission
variables after using the differencing technique, which is crucial for reduction strategies can be a beneficial means of financing eco-friendly
further investigation. Shifting to Table 4, the multivariate analysis in­ initiatives and promoting sustainable economic recovery. The proceeds
vestigates the connections between variables in different nations. The derived from these measures can be deliberately distributed to bolster
report covers the economy of the BRICS nations. Each nation is green projects, foster the growth of renewable energy, and promote
conservation activities, thus augmenting environmental sustainability.
Table 7 These findings highlight the possibility of implementing carbon
What the Granger causality test found between two variables. emission reduction measures as a versatile instrument that tackles
Aspects of Causality Standard deviation environmental concerns and promotes economic growth and recovery.
The results of this study are essential for developing and implementing
LGDP → LCO2 3.49532**
LCO2 → LGDP 1.21432
policies in China and other nations facing the complex issues of eco­
LRNE → LCO2 1.12284 nomic growth and environmental conservation.
LCO2 → LRNE 2.52893* The study’s results have wide-ranging effects and provide policy­
LTI → LCO2 2.72334 makers with crucial insight. Chinese officials should further enhance
LCO2 → LTI 1.16587
and streamline carbon emission reduction strategies to ensure their ef­
LFC → LCO2 1.02066
LCO2 → LFC 1.23662 ficacy in mitigating emissions and fostering sustainability. An important
LRNE → LGDP 1.52838 priority should be placed on promoting the development and financial
LGDP → LRNE 5.00219*** support of eco-friendly technologies. Policymakers should additionally
LTI → LGDP 2.33427 offer incentives and assistance to industries to promote sustainable
LGDP → LTI 5.39861***
practices.

6
T. Fang
Efficiently distributing tax money generated from measures aimed at
reducing carbon emissions to fund environmentally friendly programs,
renewable energy initiatives, and conservation efforts can accelerate the
shift toward sustainability. The study’s findings have implications
beyond the boundaries of China, offering significant perspectives for
other countries aiming to formulate and execute efficient policies for
reducing carbon emissions that are customized to their conditions.
Recognizing the constraints of this study is crucial. The analysis is
dependent on the data that is currently accessible, which may have
limitations in terms of accuracy and comprehensiveness. Additional
investigation may be necessary to establish a causal relationship be­
tween carbon emission reduction methods and observed results. The
study’s findings are contingent upon the specific circumstances in China
and may not directly apply to other nations.
Potential future research directions in this field include undertaking
thorough assessments over extended durations to evaluate the long-term
viability of identified effects. Examining carbon emission reduction
systems in various countries can provide significant information for
policymakers. Narrowing the scope to particular industries or sectors
could yield a more comprehensive comprehension of the effects of ini­
tiatives to reduce carbon emissions.
To summarise, this study highlights the need to implement measures
to reduce carbon emissions as a powerful means of tackling environ­
mental and economic concerns. The findings and policy implications are
relevant not only for China but also for governments worldwide striving
to achieve a harmonious equilibrium between economic growth and
environmental sustainability within a globally integrated framework.
CRediT authorship contribution statement
Tian Fang: Methodology, Formal analysis, Data curation,
Conceptualization.
Declaration of competing interest
The authors declare that they have No competing financial interests
or personal relationships that could have appeared to influence the work
Resources Policy 89 (2024) 104567
reported in this paper.
Data availability
The authors do not have permission to share data.
Acknowledgement
Fund project: Phased research results of the major project of the
National Social Science Fund in 2020, "Research on Several Major Issues
of the Modernization and rule of Law of the National Vertical Gover­
nance System" (project number: 20&ZD159).
Thanks to Mirzat Ullah and Hafiz M. Sohail for their support and
assistance in this article.
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