This study estimates the carbon mitigation effects of various energy choices, focusing on renewable energy (RE) adoption and thermal efficiency improvement. We compiled a comprehensive panel data covering 2,641 counties from 2003 to 2017 and employed a dynamic panel model for the analysis. Our results suggest that the adoption of wind power and thermal efficiency improvement, with the latter indicated by the adoption of large thermal power plants, significantly reduces carbon emissions. Notably, increasing wind power capacity exhibits a more substantial marginal reduction effect than increasing large thermal capacity. Moreover, the mitigation impact of RE is more substantial in regions with diverse renewable power types and higher renewable capacity. These results provide robust evidence regarding thermal efficiency improvement’s role in carbon mitigation and underscore the growing environmental benefits of RE as its share in installed capacity increases. Our findings emphasize the necessity of policies that incentivize the utilization of various RE types and target regional environmental efficiency gaps, which are crucial for achieving enhanced carbon mitigation during the energy transition.