Time-varying drivers of CO 2 emissions in China: a rolling window analysis (2000–2023)

Abstract

This study examines the time-varying determinants of per capita CO2 emissions in China over 2000–2023, focusing on how macroeconomic, financial, and institutional factors evolve. Using annual data from the World Bank and governance indicators, a rolling window Ordinary Least Squares (OLS) approach is employed to capture dynamic relationships between emissions and their drivers. The results show that the GDP–emissions relationship weakens after 2010 but remains positive, indicating incomplete decoupling. Clean energy finance exhibits delayed but increasingly negative effects, reflecting implementation lags. Industrial growth loses significance over time, indicating structural decarbonization, while labour force effects capture sectoral reallocation rather than scale effects. Political stability reduces emissions only when aligned with effective environmental enforcement. These findings demonstrate that emissions mitigation in China is driven by policy-mediated structural transformation rather than automatic economic adjustment. Based on these findings, the study recommends: (i) adopting adaptive, environmental policies that respond to evolving economic structures; (ii) scaling up green finance instruments – such as green bonds and international climate finance – to accelerate clean energy deployment; (iii) strengthening institutional quality and regulatory enforcement; and (iv) promoting structural transformation toward low-carbon and service-oriented sectors. These policy directions are essential to support China’s dual carbon targets of peaking emissions by 2030 and achieving carbon neutrality by 2060.