Natural resource dependence and renewable energy development: Does government policy support matter?

Abstract

Factors influencing the development of renewable energy have emerged as a hot topic of policy discussion in recent years. However, the direct impact of natural resource dependence on renewable energy has been overlooked, especially in emerging economies. Using Chinese province data from 2005 to 2019, this study employs a nonlinear panel model and a Quantile Regression with Nonadditive Fixed Effects for Panel Data (QRPD) model to examine the impact of natural resource dependence on renewable energy development and explores the great importance of government policy support. The study indicates that the influence of natural resource dependence on renewable energy development supports the “conditional resource curse” hypothesis, showing a U-shaped nonlinear relationship. The effect of natural resource dependence and government policy support on the development of renewable energy shows a dynamic change trend. In the early stage of renewable energy development, policy support is crucial, while during the growing and mature stages, natural resource dependence exerts a stronger driving force. The results of the mechanism test indicate that natural resource dependence can boost renewable energy development through green technology innovation and environmental regulation channels. This paper's conclusion provides a theoretical foundation for fostering the sustainable development of the renewable energy industry and is vital to China's efforts to reach peak carbon and carbon neutrality.