Pathway to achieving carbon goal: Insight from interaction of export diversification, renewable energy, innovation, and financial policy

Edmund Ntom Udemba (), Mohammad Mafizur Rahman (), Daberechi Ekwueme () and Lucy Philips ()
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Edmund Ntom Udemba: Shanxi Technology and Business College
Mohammad Mafizur Rahman: University of Southern Queensland
Daberechi Ekwueme: University of Huddersfield
Lucy Philips: Cyprus Western University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2024, vol. 26, issue 5, No 27, 11603-11621

Abstract: Abstract Even though China has mapped out different policies targeting the mitigation of its environmental degradation, the country still occupies the 1st position in the ranking of carbon emissions due to excessive utilization of non-renewable energy sources in its domestic economic activities. From a theoretical and empirical point of view, factors like economic growth, financial development, export diversification, technological innovation, and renewable energy can be considered to play a vital role in environmental quality. Therefore, this study exposes the environmental performance of China amidst export diversification, financial development, innovation, and clean energy use. Due to the non-availability of data, the annual data of China are converted to quarterly data from 1995Q1 to 2018Q4, and autoregressive distributed lag-(ARDL) and Granger causality approaches are adopted in this study for quantitative and insightful analysis. The findings from both approaches expose the environmental implications of the selected variables (renewable energy, financial development, technological innovation, and export diversification) to China’s sustainable development. ARDL approach has confirmed the inverted U-shaped link between financial development and emissions of carbon for China, a negative link between renewables, technologies, and carbon emissions, and a direct association exists between the diversification of export, economic growth, and emissions of carbon. This pattern points toward mitigating environmental dilapidation with renewable energy, technology, and financial development. The Granger causality output lends support to the ARDL findings; hence, a policy initiative that will promote the renewable energy sector and technological innovation through financial programs is advised.

Keywords: Environmental quality; Carbon neutrality; Export diversification; Financial development; Renewable energy; Technological innovation; China (search for similar items in EconPapers)
JEL-codes: C22 O31 O53 Q20 Q53 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10668-023-03429-0

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