Evaluating financial implications of renewable energy for climate action and sustainable development goals

Abstract

The global issue is the urgent need to shift to renewable energy sources to mitigate climate change and sustainable development. China, as the world's largest greenhouse gas emitter, is under increasing pressure to transition to renewable energy sources to meet global climate targets, including its commitment to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. This shift is necessary to achieve Sustainable Development Goals (SDGs), particularly SDG 7 (Affordable and clean energy) and SDG 13 (Climate action). Adopting renewable energy presents a number of significant challenges. Therefore, assessing the financial impact of renewable energy adoption is essential for driving climate action and achieving SDGs. This study identified six criteria, twenty-four sub-criteria, and six financial policy strategies for renewable energy development. This study employs fuzzy-based multi-criteria decision-making methods, specifically the Analytical Hierarchy Process (AHP) and VIekriterijumsko KOmpromisno Rangiranje (VIKOR), to analyze and prioritize key criteria and policy strategies in addressing the financial complexities of China's renewable energy transition. The findings of fuzzy AHP highlight financial risk, social benefits, and economic viability as crucial criteria in evaluating the financial implications of renewable energy adoption in China. Besides, the results of fuzzy VIKOR indicate that subsidies and grants, green finance initiatives, and public-private partnerships are the most significant financial policy strategies. This research provides direction for policymakers, investors, and industry stakeholders aiming to align financial sustainability to ensure a sustainable and resilient energy future.