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The Impact of Renewable Energy and Technology Innovation on Chinese Carbon Dioxide Emissions

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Regulation of Finance and Accounting (ACFA 2021, ACFA 2020)

Part of the book series: Springer Proceedings in Business and Economics ((SPBE))

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Abstract

Understanding the influencing factors of carbon dioxide emissions is an essential prerequisite for policy makers to maintain sustainable low-carbon economic growth. Based on the autoregressive distributed lag model (ARDL) and error correction model (ECM), this paper investigates the causal relationships between economic growth, carbon emission, financial development, renewable energy consumption, and technology innovation in the case of China for the period 1965–2018. Our empirical results confirm the presence of a long-run relationship among the underlying variables. Our long-run estimates show that financial development has negative significant impacts on carbon emissions, whereas renewable energy and technology innovation have limited impacts on carbon mitigations. In addition, the short-run Granger causality analysis reveals that renewable energy consumption has a bidirectional Granger causality with carbon emissions and technology innovations. In the short run, we find that financial development can positively affect China’s carbon mitigation efforts indirectly via the channels of renewable energy sources and technology innovations. Our results have three following policy implications for Chinese policy makers to maintain sustainable low carbon economic development: (i) establish a green finance market to mobilize the social capital into green industry; (ii) continue the environmental law enforcement to control for carbon emissions among energy intensive industries; (iii) provide government fiscal incentives to promote renewable energy sources on both supply and demand sides of the market.

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Acknowledgments

This paper is part of a project that has received funding from the European Union’s Horizon 2020 research and innovation program under Marie Sklodowska-Curie grant agreement No. 870245. Binyi Zhang acknowledges support from the Charles University Grant Agency (GAUK) under grant No. 862119. Karel Janda acknowledges support from the Czech Science Foundation (grant No.22-19617S). The views expressed here are those of the authors and not necessarily those of our institutions. All remaining errors are solely our responsibility. (I changed there the numbers both for EU grant and GACR grant).

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Authors and Affiliations

  1. Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic

    Karel Janda & Binyi Zhang

  2. Department of Banking and Insurance, Faculty of Finance and Accounting, Prague University of Economics and Business, Prague, Czech Republic

    Karel Janda

Authors
  1. Karel Janda
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  2. Binyi Zhang
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Editors and Affiliations

  1. Faculty of Finance & Accounting, Prague University of Economics and Business, Prague, Czech Republic

    David Procházka

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Janda, K., Zhang, B. (2022). The Impact of Renewable Energy and Technology Innovation on Chinese Carbon Dioxide Emissions. In: Procházka, D. (eds) Regulation of Finance and Accounting. ACFA ACFA 2021 2020. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-99873-8_14

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