The effect of renewable energy and economic conditions on the environmental degradation in China

Abstract

Environmental degradation has been recognized as a global issue due to high energy consumption and economic growth. This situation needs researchers to focus on, thereby, the current article examined the impact of renewable energy production (REP), energy import, renewable energy consumption (REC), gross domestic product (GDP), inflation, and foreign direct investment (FDI) on the carbon dioxide (CO2) emission in China. The study considered secondary data and extracted it from the World Bank database covering the period 1981 to 2018. The current article has examined the stationarity of the constructs using Augmented Dickey-Fuller tests and investigated the association among constructs using the quantile autoregressive distributed lag (QARDL) model. The data revealed that REP, energy import, and REC, had a significant and negative linkage with CO2 emission in China. In contrast, GDP, inflation, and FDI are linked with CO2 emission in a positive manner. The article also guided the policymakers regarding the policy development related to reducing carbon emissions using renewable energy production and consumption.