Renewable Energy for Balancing Carbon Emissions and Reducing Carbon Transfer under Global Value Chains: A Way Forward

Xixuan Guo, Kaixiang Huang, Lanyu Li and Xiaonan Wang ()
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Xixuan Guo: Department of User and Market Research, China Mobile Research Institute, Beijing 100053, China
Kaixiang Huang: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China
Lanyu Li: Department of Chemical Engineering, Tsinghua University, Beijing 100084, China
Xiaonan Wang: Department of Chemical Engineering, Tsinghua University, Beijing 100084, China

Sustainability, 2022, vol. 15, issue 1, 1-17

Abstract: Research on the relationship between a country’s renewable energy consumption and carbon emissions is of great significance for reducing carbon emissions embodied in international trade. There always exists a gap between production-based and consumption-based carbon emissions. Accordingly, this paper investigates the influence of renewable energy consumption on carbon emission balance, the ratio of production-based emissions to consumption-based emissions, in various countries using the ordinary least square (OLS) method and generalized method of moments (GMM) method. We found that a 1% increase in renewable energy consumption can decrease the carbon emission balance by 5.8%. Furthermore, renewable energy consumption can help narrow the gap between production-based and consumption-based carbon emissions in net emission exporters. In addition, renewable energy consumption can also weaken the negative impact of the global value chains (GVCs) division system on the carbon emission balance. The findings in this study fill the research gap by analyzing the heterogeneous impacts of renewable energy consumption on carbon emission balance embodied within a GVC division system in various countries and provide policy suggestions that renewable energy consumption should be encouraged in net emission exporters to reduce the carbon emission transfers.

Keywords: carbon emission balance; consumption-based carbon emissions; global value chains (GVCs); production-based carbon emissions; renewable energy consumption (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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