A machine learning algorithm to explore the drivers of carbon emissions in Chinese cities

As the world’s largest energy consumer and carbon emitter, the task of carbon emission reduction is imminent. In order to realize the dual-carbon goal at an early date, it is necessary to study the key factors affecting China’s carbon emissions and their non-linear relationships. This paper compares the performance of six machine learning algorithms to that of traditional econometric models in predicting carbon emissions in China from 2011 to 2020 using panel data from 254 cities in China. Specifically, it analyzes the comparative importance of domestic economic, external economic, and policy uncertainty factors as well as the nonparametric relationship between these factors and carbon emissions based on the Extra-trees model. Results show that energy consumption (ENC) remains the root cause of increased carbon emissions among domestic economic factors, although government intervention (GOV) and digital finance (DIG) can significantly reduce it. Next, among the external economic and policy uncertainty factors, foreign direct investment (FDI) and economic policy uncertainty (EPU) are important factors influencing carbon emissions, and the partial dependence plots (PDPs) confirm the pollution haven hypothesis and also reveal the role of EPU in reducing carbon emissions. The heterogeneity of factors affecting carbon emissions is also analyzed under different city sizes, and it is found that ENC is a common driving factor in cities of different sizes, but there are some differences. Finally, appropriate policy recommendations are proposed by us to help China move rapidly towards a green and sustainable development path.