The impact of clean energy development on economic growth in China: from the perspectives of environmental regulation.

Abstract

Given the finite nature of fossil energy and rising environmental pressures, countries are increasing focus on clean energy. By employing provincial panel data from 2003 to 2019 in China, this study sheds light on the effect of clean energy development on economic growth and the role of environmental regulation in the relationship. The study utilized moderating and threshold effect models for empirical estimation. Results show that clean energy development has a positive impact on economic growth in general. In terms of region heterogeneity, the contribution of clean energy development to economic growth is more pronounced in regions with higher levels of economic development. Furthermore, we provide evidence that market-based environmental regulation has a single threshold, which has a positive regulating effect on the relationship between clean energy development and economic growth, while administrative environmental regulation has a double threshold, which has a negative regulating effect on the relationship between the two. The findings of our study provide useful policy directions for maintaining a balance between economic growth and environmental prosperity.