Renewable energy resources and sustainable development goals: Evidence based on green finance, clean energy and environmentally friendly investment

Abstract

During the COVID-19 pandemic, the economic recession has been experienced by the entire world. This recession has caused the prices of natural resources to shrink due to a reduction in energy demand. This has caused the renewable energy projects to lose the interest of public and private finance participation. Moreover, these trends have led to a reduction in the competitiveness of renewable energy project projects that could have led to the achievement of sustainable development goals. The present study has investigated the causality relationship between investments in renewable energy and green finance while considering factors like economic growth electricity output of the renewable energy sector and the investment of private sectors in the energy sector development. China serves as the study's setting, and time series data from 2000 to 2020 were employed throughout the previous 21 years. The researcher has shown that IR, REO, and GF exhibit more erratic behaviour in comparison to GDP and IEP in the chosen period using the new technique of the wavelet power spectrum. Additionally, the coherence wavelet technique has shown that there is a unidirectional causal link from GDP to IR and IR to GF as well as a bidirectional substantial correlation between IR and our REO. In both long and short-run analyses, different kinds of causal relationships have been found. However, IEP did not show any link with IR. Based on the empirical findings in the current study the researcher recommends that the Chinese government should design specific policies to deal with the volatility in IR, GF, REO while also looking to enhance investments in these sectors to achieve sustainable growth, environmental sustainability, and increased investments in renewable energy projects for the production of increased renewable energy in China.