The Green Engine of Growth: Assessing the Influence of Renewable Energy Consumption and Environmental Policy on China’s Economic Sustainability

Lin Wang, Yugang He () and Renhong Wu
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Lin Wang: Department of Business, Ningbo University of Finance and Economics, Ningbo 315175, China
Yugang He: Department of Chinese Trade and Commerce, Sejong University, Seoul 05006, Republic of Korea
Renhong Wu: School of Management, Kyung Hee University, Seoul 02447, Republic of Korea

Sustainability, 2024, vol. 16, issue 8, 1-25

Abstract: Utilizing Fourier autoregressive distributed lag and Fourier Toda–Yamamoto causality methodologies, this research assesses the effects that renewable energy consumption and environmental policy had on the economic sustainability of China from 1991 to 2022. Our findings highlight the positive impacts of renewable energy use and stringent environmental policies on China’s economic growth, while also pinpointing the supportive roles played by foreign direct investment, trade openness, and financial sector evolution in fostering a sustainable economic environment. Conversely, a reliance on fossil fuels emerges as a significant barrier to sustainability. Causality tests confirm the essential roles of renewable energy and environmental policies in advancing China’s economic sustainability. This study underscores the critical need for integrating sustainable energy and environmental strategies within China’s economic development framework, advocating for a holistic policy approach that balances economic growth with environmental conservation. This research underscores the imperative for a sustainability-centered strategy for China’s economic advancement.

Keywords: renewable energy consumption; environmental policy; economic sustainability; Fourier Toda–Yamamoto causality test; Fourier autoregressive distributed lag methodology (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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