Which productivity can promote clean energy transition —total factor productivity or green total factor productivity?

Abstract

Developing clean energy is a key pathway and an inevitable choice for achieving the goals of carbon peak and carbon neutrality. From a global perspective, technology is increasingly affecting the trajectory of energy transition, driving clean energy into a stage of rapid development. Therefore, this paper focuses on exploring the dynamic evolutionary characteristics of clean energy transitions driven by different productivity. Using panel data from 171 economies from 1990 to 2019, this paper systematically examines the impact of Total Factor Productivity (TFP) and Green Total Factor Productivity (GTFP) on clean energy transitions. The empirical results indicate that both TFP and GTFP positively impact clean energy transition. Specifically, clean energy consumption increases by 3.35% and 6.03%with a one standard deviation change in TFP and GTFP respectively. Upon decomposing TFP and GTFP, it was found that Green Efficiency Change (GECH) and Green Technical Change (GHCH), especially GECH, are the main factors driving the clean energy transition. Heterogeneity analysis shows that, in developed economies, GTFP has a larger positive impact on clean energy transition than TFP. Furthermore, GTFP demonstrates a significant positive impact on the clean energy transition both before and after the 2008 financial crisis, whereas TFP's positive impact is only evident before the crisis. Our findings emphasize the social benefits of further investments in GTFP.