Dual carbon economy modeling in advanced economies

Abstract Utilizing the cross-sectional fully modified OLS (FMOLS) method, this paper tackles the pressing need to address climate change disasters, particularly in the context of recent COVID-19 restrictions. By developing an econometric model specifically for advanced economies, the study aims to enhance understanding and reduce carbon emissions. Examining ten advanced economies from 1995 to 2019, it identifies a significant gap in the literature concerning the integration of demographic, social, economic, and political (DSEP) factors in dual carbon economy models. The results show that a 1% improvement in good governance is associated with a 0.23% reduction in carbon footprint, due to stricter environmental regulations. In contrast, a 1% increase in economic growth results in a 0.17% rise in carbon footprint, driven by industrial activities. Similarly, a 1% rise in electricity consumption leads to a 0.32% increase in carbon footprint, reflecting dependence on fossil fuels. Additionally, a 1% increase in population size corresponds to a 0.21% rise in carbon footprint, linked to higher urban energy consumption. Finally, a 1% increase in the poverty ratio results in a 0.17% rise in carbon footprint, underscoring the influence of socio-economic factors on sustainability. The paper advocates for a comprehensive approach to fostering a dual carbon economy, emphasizing green economic growth, smart, sustainable cities, social sustainability literacy, and sustainable governance.