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Sustainable Development Pathways for China: How Green Innovation, Geopolitical Risks, and Energy Security Shape Carbon Neutrality

Author

Listed:
  • Fayyaz Ahmad
  • Aamir Javed
  • Nabila Abid
  • Junaid Aftab
  • Maria Rucsandra Stan

Abstract

This study investigates the influence of green technological innovation (GTI), energy security, and geopolitical risk on China's carbon neutrality trajectory, with control variables including environmental taxes, trade openness, foreign direct investment (FDI), and gross domestic product (GDP). Annual data from 1994 to 2020 are analyzed using a dynamic simulated autoregressive distributed lag (ARDL) model to estimate short‐ and long‐term relationships, complemented by frequency‐domain spectral causality analysis to test robustness. The findings show that geopolitical instability and energy security risks significantly increase CO2 emissions across all time horizons, whereas GTI has a statistically significant adverse effect, confirming its role as a long‐term decarbonization tool. Asymmetric responses indicate that innovation gains gradually reduce emissions, whereas downturns in innovation cause sharper deterioration. Environmental taxes (ERT) are effective in curbing emissions, particularly in the medium term. GDP growth contributes to higher emissions, while the effects of trade openness and FDI vary over time. The results suggest that China must strengthen diplomatic ties to manage geopolitical risks, accelerate the integration of renewable energy to reduce coal dependence, enforce stricter environmental regulations for energy‐intensive sectors, and prioritize GTI with targeted funding and wider diffusion. Expanding international collaboration and addressing regional disparities in absorptive capacity will be vital to meeting long‐term carbon neutrality targets.

Suggested Citation

  • Fayyaz Ahmad & Aamir Javed & Nabila Abid & Junaid Aftab & Maria Rucsandra Stan, 2026. "Sustainable Development Pathways for China: How Green Innovation, Geopolitical Risks, and Energy Security Shape Carbon Neutrality," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(S2), pages 505-527, March.
    • Handle: RePEc:wly:sustdv:v:34:y:2026:i:s2:p:505-527
    DOI: 10.1002/sd.70330
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