<p>Accurately pinpointing the historical origins of CO₂ releases during the course of national economic progress is a crucial foundation for emerging economies to mitigate CO₂ releases. Utilizing China’s distinctive system of economic development objectives, this study delves into the underlying systemic reasons for China’s carbon-intensive growth and endeavors to conduct an empirical examination of its environmental consequences. Studies have shown that setting absolute growth targets in horizontal competition significantly increases city CO₂ releases, while setting relative growth targets in vertical competition exacerbates the impact of CO₂ releases. In addition, the heterogeneity analysis shows that cities with high resource efficiency and low economic development emit more CO₂ from growth targets. Institutional tests have shown that economic development goals can result in substantial growth in the overall consumption of fossil-based primary energy sources and a reduction in the energy efficiency of businesses, but also to an increase in primary energy use and a decrease in industrial energy efficiency. The results provide useful guidance for the internal institutional explanation of high levels of CO₂ release in China and the development of mechanisms for developing countries to reduce global releases.</p>