Heterogeneity analysis of factors influencing CO2 emissions: The role of human capital, urbanization, and FDI

Reducing carbon dioxide (CO2) emissions is critical to combating global warming and achieving sustainable global economic development. This research combines the stochastic effects regression (STIRPAT) framework and a finite mixture model (FMM) with concomitant variables to investigate the influencing factors and heterogeneity characteristics of CO2 emissions in 96 countries between 2000 and 2020. The findings of the study are as follows. First, the full-sample regression results show that an increase of population aggravates CO2 emissions, the impact of affluence on CO2 emissions exhibits an inverted U-shape trend, and technology significantly improves CO2 emissions. Second, the samples were divided into three groups based on FMMnamed group A, group B and group C. In the three groups, he impacts of affluence and technology on CO2 affluence and technology have different effects on CO2 emissions, but a greater population size significantly raises CO2 emissions. Third, this study presents human capital, urbanization, and foreign direct investment (FDI) as concomitant variables to group the models objectively. The coefficient of the concomitant variable is positive, indicating that the differences among groups A, B, and C can be explained by said variables. During the period from 2000 to 2020, the group transformation of 16 countries is mainly due to the promotion of human capital, urbanization, and FDI. Reducing CO2 emissions is a global action that requires the joint efforts of all countries. Therefore, it is important to control the rate of population growth, increase the level of economic development, and accelerate the development of technologies, depending on the characteristics of different countries. The role of human capital, urbanization transition and FDI in promoting CO2 reduction should be fully utilized.