How do mineral resources influence eco-sustainability in China? Dynamic role of renewable energy and green finance

Abstract

The rapid economic expansion of China has significantly aggravated resource consumption and national carbon emissions, creating a severe ecological threat. Therefore, this research investigates the role of mineral resources, green financing, and renewable energy as determinants of ecological sustainability in China from Q1-2000 to Q4-2020. This research applies the Bootstrap Autoregressive Distributed Lagged (BARDL) model for empirical findings. The descriptive results confirm the normal distribution of mostly variables with stationarity of order one. The cointegrated analysis confirms the long-term association between the variables. The findings through BARDL establish a long-term relationship between green financing, renewable energy, mineral resources, and economic growth. More specifically, it shows that renewable energy and green investment projects facilitate the reduction of carbon emissions in the long run. Contrarily, the extraction of mineral resources and economic growth increase China's carbon emissions. Similar findings have been observed in the short run; however, the magnitude of the coefficients is lower. The Granger causality analysis confirms a bidirectional linkage between green financing, renewable energy, carbon emission, mineral resources, and economic growth, which offered relevant policy suggestions.