Environmental technology’s diminishing marginal returns: a study of green patents and emission reductions in China

Introduction Do environmental technologies always yield desirable returns? This study addresses this question through the lens of command-and-control environmental regulation. It explores the theoretical and empirical mechanisms influencing the efficacy of technology in reducing emissions, focusing on the non-linear characteristics of technological returns under equilibrium conditions. Methods A socio-economic model integrating pollution discharge issues was developed to examine the marginal effects of emission reduction technology. Empirical validation was conducted using green patent data from Chinese listed companies (2005–2020) and pollution emissions data from various cities. Fixed effects models and generalized random forest models were employed to analyze the relationships. Results The analysis revealed that technological innovation exhibits diminishing marginal returns in reducing emissions due to existing technological constraints. The results were further dissected by categorizing patents and city characteristics, shedding light on the factors influencing emission reduction effectiveness. Discussion The findings emphasize the importance of addressing the non-linear nature of technological innovation in environmental regulation. Policy recommendations include fostering tailored innovation strategies and supporting cities with unique characteristics to maximize technological impact on emission reduction.