Uncovering the role of renewable energy innovation in China's low carbon transition: Evidence from total-factor carbon productivity

Abstract

The rapid growth of Chinese renewable energy innovation has shown great potential to improve total-factor carbon productivity (TFCP), but it still lacks sufficient literature understanding of the detailed impact and mechanisms. This paper empirically tests the influence mechanism, effect characteristics, and causal configurations based on a sample of 30 provinces from 2006 to 2017. We reveal optimizing the energy structure is the crucial intermediate channel for renewable energy technology innovation improving the TFCP, but it is not the unique mechanism. Since renewable energy technology innovation could directly improve the efficiency of the full industrial chain of electricity, the remaining channel can be summarized as the power operating efficiency improvement. From the heterogeneous analysis, the technological innovations in wind and solar energy display relatively larger contributions to the growth of total-factor carbon productivity. The threshold effect analysis further indicates the larger the coal consumption, the larger probability for renewable energy innovation to play a role in improving TFCP. Eventually, we observed four causal configurations of renewable energy technology innovation to determine the TFCP. It suggests renewable energy innovation cannot affect TFCP independently and often acts with other factors, eventually explaining the actual levels of regional TFCP.