Convergence Analysis and Testing of Regional Effects of Green Finance on The Growth of Renewable Energy

Abstract

ABSTRACT A paradigm shift in energy production and use is essential in the pursuit of carbon peaking and neutrality, and the expansion of renewable energy is a cornerstone of such a shift. This article first proposes an index that comprehensively measures renewable energy development in 30 provinces in China from 2010 to 2022. Then, the σ and β convergence models are applied to investigate the uniformity of renewable energy development. Furthermore, a spatial Durbin model is estimated to examine the spatial impact of green finance on renewable energy development. The results show that from 2010 to 2020, China has witnessed a significant increase in renewable energy use in its eastern, central and western regions, with the western region accelerating faster than its counterparts. During the same period, a remarkable trend of high convergence in renewable energy development has been observed, despite a slowdown in the spatial convergence rates between the central, eastern, western and national levels. The positive spatial spillover effect of renewable energy has increased significantly. The growth of renewable energy in the region and its surrounding areas is positively influenced by the growth of green finance.