Regulatory pathways to green energy transition for sustainable environment: The fostering role of human rights, banking sector development, economic complexity, and economic freedom

Abstract

Green energy transition directly contributes to Sustainable Development Goals 7 and 13, which are among the 17 development goals determined by the United Nations. However, what are the determinants of this green energy transition? Researchers' answers to this question will assist in formulating policy prescriptions that will enable concrete steps toward achieving these goals. This study investigates how the development of the banking sector, human rights, economic complexity, and economic freedom affect the green energy transition in China, which is the biggest emitter of greenhouse gases globally but is also one of the leading countries in renewable energy production. The study covers the years 1995–2022. Advanced time series analysis methods were employed, and robust results were reported. According to the findings, Economic Freedom, Human Rights, and Economic Complexity have increased the transition to green energy in China. No effect of banking sector development was found. The country should improve economic freedom and human rights and increase knowledge/innovation-based production to accelerate China's transition to green energy and contribute to environmental sustainability.