Will peer effects exist on renewable energy development across China’s provinces?

Abstract

The Chinese government promises to reach the carbon emission peak by 2030 and achieve the carbon neutrality by 2060. Renewable energy development is important for achieving this target. Local governments’ behaviors and attitudes might be influenced by neighbors. Therefore, this study uses simultaneous autoregressive models (SAR) to examine the peer effects on renewable energy development across China’s provinces and explain the imbalanced renewable energy developments across regions in China. The results exemplified: ① The peer effects exist in China and the endogenous interaction is the main cause. ② The interaction between geographically adjacent provinces have greatest peer effects. ③ Both competition mechanism and learning mechanism induce the peer effects and the imbalanced development. This research introduces energy-related peer effects at the provincial level to reflect the preferences of governments and reveal the underlying mechanisms involved. It also provides suggestions to policy makers: ① Select developed provinces as the frontrunner to promote the renewable energy development in neighboring areas. ② Regional renewable energy development policies need to be considered. ③ Central government should consider adding “green growth indicators” into evaluation system to avoid the asymmetrical incentives policies between economic growth and environmental protection.