Energy-economy-environment nexus in China: The role of renewable energies toward carbon neutrality

Abstract

Global climate change triggered by the escalating carbon dioxide (CO₂) emissions resulting from heightened economic expansion and consumption of energy represents the foremost environmental concern in the contemporary global context. China is accountable for nearly 27% of total global CO₂ emissions, making it the largest emitter worldwide. This study explores the consequences of economic outgrowth, fossil fuel, and renewable energy utilization on China's emissions of CO₂. The study utilized an autoregressive distributed lag (ARDL) model to analyze China's annual data from 1965 to 2022. The ARDL bounds test results indicate the presence of long-term cointegration among the variables. The empirical results specify that a 1% growth in the utilization of fossil fuels and the economy leads to long-term growth of 4.97% and 0.58% in CO₂ emissions. In the short term, these increases amount to 2.42% and 1.21%, respectively. Conversely, a long-term enhancement of 1% in renewable energy utilization could result in a reduction of CO₂ emissions by 1.39%, whereas in the short term, the reduction would be 0.50%. This study proposes policy suggestions for the attainment of sustainable development and carbon neutrality.