Factors influencing renewable energy consumption in China: An empirical analysis based on provincial panel data

Abstract

The development of renewable energy is the key to deal with climate change and low-carbon economy development in China. Here, based on a balanced panel dataset of 30 provinces in China cover the period of 1996–2013, this paper explores the effect of economic growth, CO2 emissions, foreign trade (exports or imports) and urbanization on renewable energy consumption at the national and regional levels by using a dynamic system-GMM panel model. The empirical results show that the influence of economic growth, CO2 emissions, foreign trade and urbanization on the renewable energy consumption is heterogeneous across regions. First, economic development has an important positive impact on renewable energy consumption in the four panels we consider and the impact is the greatest in the eastern region, follows by the national, central and western regions. Second, CO2 emissions have a significant positive impact on renewable energy consumption in the central and national regions. However, CO2 emissions have a weak negative impact on the consumption of renewable energy in the eastern region, and have no impact in the western region; Third, per capita exports are found to have a positive effect on the renewable energy consumption, with the greatest impact in the central region, followed by the eastern and national regions and have a weak negative impact in the western regions; Fourth, per capita imports have a negative effect on renewable energy consumption in the eastern, western and national regions and have a weak positive effect in the central region; Finally, the changes in the urbanization level significantly affect the renewable energy consumption in the four panels we consider and the impact is the greatest in the eastern region with high level of urbanization, follow by the central and western regions. On the basis of this study, we put forward the corresponding countermeasures and suggestions to achieving sustainable development in China.