Low-carbon innovation, economic growth, and CO2 emissions: evidence from a dynamic spatial panel approach in China

Low-carbon innovation plays an essential role in carbon reduction worldwide. This study investigates the nexus between low-carbon innovation, economic growth, and carbon emissions by the dynamic spatial Durbin model from 2007 to 2020. First, the Moran index results verify the provincial spatial agglomeration of carbon emissions. High-emission provinces concentrate in major economic zones and energy extraction areas. Second, the effect decomposition results show that long-term and short-term effects are consistent. Low-carbon innovation has a significant mitigation effect on carbon emissions in local regions, which effect, however, is not significant in the adjacent areas. The environmental Kuznets curve hypothesis is validated locally, but all provinces and cities have not reached the inflection point of the environmental Kuznets curve, and the linkage effect in adjacent regions remains insignificant. The above results have been tested to be robust. Third, the results of the mechanism analysis show that environmental policies, absorptive capacity, and financial development play a moderating role in the relationship between low-carbon innovation and carbon emissions. Finally, the heterogeneity test showed significant differences between Eastern, Central, and Western. The direct effect of low-carbon innovation exists in Eastern and central regions; the spillover effect of low-carbon innovation is only in the eastern region. In addition, corresponding measures are proposed based on the conclusions.