Industrialization, ICT, and China’s environmental transition toward carbon neutrality: evidence from wavelet cross-quantile regression

Industrialization and information and communication technology (ICT) are central to China’s economic transformation, yet their roles in the country’s transition toward carbon neutrality remain ambiguous. This study examines the impacts of industrialization, ICT development, financial development, and renewable energy consumption on CO₂ emissions in China using quarterly data from 1990Q1 to 2024Q4. To capture nonlinear and heterogeneous effects across emission levels and time horizons, the analysis employs Wavelet Cross-Quantile Regression. The results show that industrialization and ICT expansion have positive and persistent effects on CO₂ emissions, particularly at higher emission quantiles and in the long run. In contrast, financial development reduces CO₂ emissions in the medium and long term, while renewable energy consumption consistently mitigates emissions, with stronger long-run effects. These findings suggest that China’s carbon neutrality goals require targeted green financial frameworks, regulation of energy-intensive digital infrastructure, and accelerated renewable energy integration into industrial and ICT sectors to ensure a sustainable environmental transition.