Do chemical fertilizers, area under greenhouses, and renewable energies drive agricultural economic growth owing the targets of carbon neutrality in China?

Abstract

Striking an equilibrium between economic and ecological well-being has become a top priority for governments throughout the world. In the modern period, global economies, particularly those of developing nations, highlight the need for attaining eco-friendly growth, in which environmental impact statistics are targeted to be minimized while economic growth is increased. However, in the vast majority of situations, emerging countries like China are prospering economically because they are striving to reduce their environmental imprint. Therefore, this study aims to scrutinize the associations of renewable energy consumption, chemical fertilizer consumption, carbon emissions, and area under greenhouses with agricultural economic growth in China for the attainment of carbon neutrality goals. Secondary annual time series data was gathered from the World Bank's development indicators, British Petroleum's energy statistics, and China's agriculture department from 1980 to 2020. The Autoregressive Distributed Lag (ARDL) bounds testing, along with the novel Kripfganz P-value and the novel Dynamic Autoregressive Distributed Lag (DYARDL) simulations model, were employed in the study. The outcomes of the unit root test confirm the stationary properties of all the study variables. The ARDL bounds testing confirms the cointegration among variables. In both the long and short run, the DYARDL simulations model reveals that increasing renewable energy consumption and greenhouse area enhances agricultural economic growth. Carbon emission intensification cuts agricultural economic growth in the long and short-run. While chemical fertilizer consumption doesn't show a significant long-term or short-term association, with a negative coefficient. Furthermore, the 10% positive and negative shocks of novel DYARDL simulations confirm the results of long-run and short-run analysis. The study's results suggest that the government should impose a ban on fossil fuel use and start using renewable sources of energy instead. This will help the country meet its carbon neutrality goals in the long run, along with sustainable agricultural economic development.