Does Non-Fossil Energy Usage Lower CO2 Emissions? Empirical Evidence from China

Abstract

This paper uses an autoregressive distributed lag model (ARDL) to examine the dynamic impact of non-fossil energy consumption on carbon dioxide (CO 2 ) emissions in China for a given level of economic growth, trade openness, and energy usage between 1965 and 2014. The results suggest that the variables are in a long-run equilibrium. ARDL estimation indicates that consumption of non-fossil energy plays a crucial role in curbing CO 2 emissions in the long run but not in the short term. The results also suggest that, in both the long and short term, energy consumption and trade openness have a negative impact on the reduction of CO 2 emissions, while gross domestic product (GDP) per capita increases CO 2 emissions only in the short term. Finally, the Granger causality test indicates a bidirectional causality between CO 2 emissions and energy consumption. In addition, this study suggests that non-fossil energy is an effective solution to mitigate CO 2 emissions, providing useful information for policy-makers wishing to reduce atmospheric CO 2 .

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