Cautionary perspectives on greenhouse impact of innovation: exploring the nonlinear link between breakthrough low-carbon technological innovation and corporate carbon emissions

Breakthrough low-carbon technological innovation (BLCTI) is a critical driver of sustainable economic and social development, but its impact on corporate carbon emissions (CCE) is underexplored. This study develops a theoretical model of the nonlinear relationship between BLCTI and CCE based on the innovation process. This study uses data from Chinese A-share listed manufacturing firms between 2012 and 2022 and empirically examines this relationship. The results reveal that: (1) BLCTI exhibits an inverted U-shaped effect on CCE, indicating that when innovations have limited scale and commercialization, they may actually increase emissions, a risk that warrants caution from both firms and policymakers; (2) higher levels of artificial intelligence adoption, ESG ratings, and industry competition shift the inverted U-shaped curve’s turning point downward and to the left, accelerating the carbon-reduction effects of breakthrough innovations; (3) the inverted U-shaped relationship holds only for non-high-energy-consuming manufacturers, non-state-owned enterprises, firms with records of environmental penalties, and during the period of 2017–2022. These findings offer important insights for enhancing the carbon mitigation effectiveness of BLCTI.