How does climate policy uncertainty affect green technology innovation at the corporate level? New evidence from China

The frequent occurrence of extreme weather reminds us to focus more attention on sustainable development. A panel of Chinese A-share listed companies is selected as a research sample to explore how climate policy uncertainty has an effect on companies' green technology innovation. According to the empirical findings, corporate green technology innovation is negatively related to the uncertainty of climate policy. By affecting their R&D investments and risk tolerance, corporations' ability to develop in green technologies has been impacted by the uncertainty of climate policy. We also note that due to the nature of business ownership, the detrimental effect of uncertain climate policy on green technology innovation varies slightly between companies. While environmental regulations reinforce the negative impact of climate policy uncertainty, government subsidies can significantly mitigate this negative impact. These results have important theoretical and practical implications for the development of green economy theory and the realization of energy efficiency in various countries.