The role of green energy deployment and economic growth in carbon dioxide emissions: evidence from the Chinese economy.

Abstract

After reform and opening-up, rapid industrialization and urbanization led to environmental degradation in China, including excessive energy consumption, soil contamination, and water pollution. Toward sustainable development, the Chinese government has promoted the introduction of clean energy sources such as geothermal and hydroelectric power generation, which have reduced the environmental burden. However, the impact of this energy shift on environmental improvement and economic growth is unclear. This study empirically analyzes the impact of green energy deployment and economic growth on CO2 emissions in China. The analysis of time series data from 1980 to 2020 shows that in the long run, a 1% increase in renewable energy significantly reduces CO2 emissions by 0.87%, and a 1% increase in GDP significantly increases CO2 emissions by 0.26%. In contrast, in the short run, the negative effect of renewable energy on CO2 emissions and the positive effect of GDP on it are not significant. This result was confirmed after the robustness checks. Based on the results obtained, several policy recommendations are made.