Do Technological Innovation and Environmental Regulation Reduce Carbon Dioxide Emissions? Evidence from China

The Chinese industry holds a significant position in the national economy. However, industrial carbon dioxide (CO₂) emissions account for a large proportion of the total CO₂ emissions, which has a negative impact on the environment. To identify the factors affecting industrial CO₂ emissions, a vector autoregressive (VAR) model system is established to empirically test the factors influencing industrial CO₂ emissions, using data on industrial technology innovation (TI), environmental regulation, and CO₂ emissions from 2000 to 2023 in China. The results show that there is a cointegration relationship between industrial technological innovation, environmental regulation and CO₂ emissions. Each unit increase in environmental regulation will reduce 2.132 units of CO₂ emissions. Meanwhile, each unit increase in technological innovation results in a decrease of 0.067 units of CO₂ emissions. Compared with TI, environmental regulation has a greater impact on CO₂ emission reduction. The effects of the impulses of the stochastic perturbation terms of industrial TI, environmental regulation, and CO₂ emissions on the current and future values of industrial TI, environmental regulation, and CO₂ emissions in the VAR system are de-picted through the VAR impulse response function. The contribution of each new interest shock to the change of industrial TI, environmental regulation and CO₂ emissions is analyzed by variance decomposition. This paper enriches the application of institutional theory and technological in-novation theory in CO₂ emission reduction and also provides a reference for relevant departments to formulate emission reduction policies and industrial technological innovation.