Research into the Correlation between Carbon Emissions, Foreign Energy Investment, and China’s Financial Advancement

Abstract

Carbon dioxide emissions are the primary driver of global climate change. This study aims to analyze the relationship between inward foreign direct investment in the energy sector and CO2 emissions in China versus other countries. For this, the co-integration methods were used. The results suggested that China should encourage the adoption of green technologies in order to reduce CO2 emissions and enforce strict environmental laws. Another necessary step is to stop the licensing of polluting industries that emit high amounts of CO2 emissions. The present findings can be used to develop state programs for environmental protection. Future research can examine the relationship of FDI in the energy sector with indicators other than pollution with CO2 emissions, for example, with the consumption of renewable energy sources.