Energy-economy-environment nexus in China: The role of renewable energies toward carbon neutrality

Abstract

Global climate change triggered by the escalating carbon dioxide (CO2) emissions resulting from heightened economic expansion and consumption of energy represents the foremost environmental concern in the contemporary global context. China is accountable for nearly 27% of total global CO2 emissions, making it the largest emitter worldwide. This study explores the consequences of economic outgrowth, fossil fuel, and renewable energy utilization on China's emissions of CO2. The study utilized an autoregressive distributed lag (ARDL) model to analyze China's annual data from 1965 to 2022. The ARDL bounds test results indicate the presence of long-term cointegration among the variables. The empirical results specify that a 1% growth in the utilization of fossil fuels and the economy leads to long-term growth of 4.97% and 0.58% in CO2 emissions. In the short term, these increases amount to 2.42% and 1.21%, respectively. Conversely, a long-term enhancement of 1% in renewable energy utilization could result in a reduction of CO2 emissions by 1.39%, whereas in the short term, the reduction would be 0.50%. This study proposes policy suggestions for the attainment of sustainable development and carbon neutrality.