The impact of renewable energy policies on the energy transition -– An empirical analysis of Chinese cities

Abstract

Amidst the intensifying global energy crisis, the advancement of renewable energy stands as a critical element in China's strategy for energy transition (ET) and efforts to mitigate climate change. This paper aims to offer fresh insights into the determinants of ET from the renewable energy policy (REP) perspective. By employing panel data from 280 Chinese cities covering the period from 2003 to 2019, and applying the text-mining methodology, this analysis initially explores the impact of REP on the ET. Our empirical findings demonstrate that REP significantly promotes ET, with our proposed hypotheses successfully enduring a series of robustness tests. This acceleration is predominantly through two mechanisms: the stimulation of green technology innovation and the enhancement of ET readiness. However, the influence of energy system performance on this transition is insignificant. This investigation reveals a pronounced regional heterogeneity in the effects that REP on ET. Specifically, the positive impact of these policies is stronger in the eastern cities of China, also in small and medium-sized cities, and cities with high levels of economic development, human capital, finance development, lower environmental pollution levels, and old industry areas. These findings provide valuable references for China and other countries pursuing similar objectives.