The effect of natural resources and economic factors on energy transition: New evidence from China

Abstract

Recently, energy transition is an essential element for global development and needs the attention of recent researchers and policymakers. Thus, the present research investigates the impact of natural resources (total natural resources rent and natural gas rent) and economic factors (energy import, economic growth, and population growth) on the energy transition in China. Secondary data were collected from world development indicators (WDI) from 1971 to 2019. The Augmented Dickey-Fuller (ADF) test, Phillips–Perron (PP) test, Kwiatkowski–Phillips–Schmidt–Shin (KPSS) and “zivot-andrews structural break unit root” test was also utilized to check for stationarity among the autoregressive distributed lag model (ARDL) along with the error correction model (ECM) were used to examine the relationships between constructs. The results found that natural resources (total natural resources rent and natural gas rent) and economic factors (energy import, economic growth, and population growth) have a positive association with energy transition in China. The study concluded that energy transition is the essential requirement due to high usage of natural resources and high economic development. These results are helpful for energy sector regulators when formulating the rules and regulations related to energy transition in the country.