Abstract
Developing energy from renewable sources and modernizing the energy system are critical components of China’s efforts to combat climate change. Policymakers and authorities have made significant attempts to bring them. However, one of the major impediments to China’s energy revolution is financial limitations, which are inextricably linked to the country’s economic growth. The present research paper intends to investigate the relationship between economic growth and sustainable financial development on the use of energy from renewable sources in both the short and long run in the context of China. To achieve this, the researchers have utilized the panel data consisting of 10 years from 2011 to 2020. When compared to cross-sectional and time-series data samples, the panel data model offers many benefits. For starters, the panel data includes information on the passage of time and the cross-sectional area. Another benefit of using panel-data models with a larger degree of freedom is that they provide more stable and reliable estimates across short periods across cross-sections. In the case of the short run, there is a positive relationship between economic and financial development and the use of energy from renewable sources in the context of all of China. While in the case of long-term effects, the results indicate the adverse impact of financial development on the use of energy from renewable sources in the western regions of China. These results were deduced using the causality test Granger proposed to determine the path of the causal relationship and the direction of the relationship between the variables. These results indicated that the relationship between economic and financial development in east China was unidirectional, and the nature of the underlying relationship was causal. Meanwhile, in east and west China, economic development in China as a whole has been unidirectionally increasing energy from renewable sources. Our empirical findings suggest many strategies for promoting the growth of energy from renewable sources.
Highlights
The financial sector is comprised of the institutions, tools, and markets—as well as the legal and regulatory framework—that enable transactions to be completed through the extension of credit to individuals and businesses
We focus our attention on the latest data from the period of 2011 to 2020 based upon 20 Chinese provinces and autonomous regions of China, including municipalities [1], was used to test the impact of economic growth and financial development on the consumption of renewable energy sources
This points to fact that increase in production and consumption of renewable energy tends to support overall financial development of Chinese financial sector as they tend to profit from overall positive impact brought on by Renewable Energy Consumption (REC)
Summary
The financial sector is comprised of the institutions, tools, and markets—as well as the legal and regulatory framework—that enable transactions to be completed through the extension of credit to individuals and businesses. A result of different types and combinations of informational costs, enforcement costs, and transaction costs in conjunction with different legal, regulatory, and tax systems in different countries and throughout history has motivated a variety of different financial contracts, markets, and intermediaries. China’s commitment is to peak GHG emissions in 2030 and to grow non-fossil fuel energy to approximately 20% of total energy use. It is still up for debate whether policies and measures can be taken to attain such a lofty objective without negatively impacting economic performance
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
