China’s clean energy plan hindered sustainable development due to infrastructure investments crowding out research and innovation.
Authors
Hongshan Ai, School of Economics and Trade, Hunan University, Changsha 410079, China
Xiaoqing Tan, School of Economics and Trade, Hunan University, Changsha 410079, China
Sachin Kumar Mangla, Jindal Global Business School, O. P. Jindal Global University, India; Plymouth Business School, University of Plymouth, UK
Ali Emrouznejad, Surrey Business School, The University of Surrey, Guildford, UK
Fan Liu, School of Business Administration, Zhongnan University of Economics and Law, Wuhan 430073, China
Malin Song, Collaborative Innovation Center for Ecological Economics and Management, Anhui University of Finance and Economics, Bengbu 233030, China
Summary
The mitigation of climate change is essential for sustainable development, and the transition to renewable energy plays a vital role in this process. Policies aimed at promoting the adoption of renewable energy could enhance sustainable development. This study measures sustainable development by using green total factor productivity (GTFP), which captures the capacity to foster economic growth while minimizing resource consumption and reducing pollution and carbon emissions. Using the slacks-based measure (SBM) and global Malmquist-Luenberger (GML) index, we calculate the GTFP index of 281 Chinese prefectures from 2012 to 2022 based on data from the China City Statistical Yearbook.
An increase in GTFP indicates higher output with lower emissions from finite resources, thereby signifying the improvement in sustainable development. By conducting a difference-in-differences (DID) design, we investigate the effects of China’s Plan on Clean Energy Accommodation (2018–2020) (PCEA) on sustainable development. Our DID estimates show that the PCEA hinders sustainable development. A series of robustness checks reinforce our main findings. Technological progress is the foundation and driving force of sustainable development. Local governments have to invest in infrastructures to promote renewable energy transition, which may crowd out their expenditure on research and innovation and temporarily impede technological progress. However, the shift toward renewable energy contributes to a cleaner energy structure and reduces carbon intensity. Our heterogeneity analyses reveal that southern cities, resource-based cities, and cities with lower stock of human capital are more vulnerable to energy transition, providing valuable implications for regional sustainable development.
Published in: Energy Economics
To read the full article, please click here.
