Impact of government governance and environmental taxes on sustainable energy transition in China: fresh evidence using a novel QARDL approach

Abstract

Although economies have experienced immense growth in recent times, however, it also comes with environmental and social consequences which question the current practices and threaten the well-being of current as well as the future generation. This realization, thus, pushes institutions to bring change in existing energy-related policies in order to incorporate social and environmental concerns. Clean energy transition, in this regard, is gaining attraction all over the world as it shifts away economies from non-renewable resources. The study, thereby, intends to explore the role of governance and environmental taxes in the energy transition in China economy over the period 1999–2019. The roles of industrialization and economic growth in the transition of energy are taken into consideration. The recently introduced legit quantile autoregressive distributed lag (QARDL) model and Granger causality in quantiles are applied to quarterly data spanning 1999Q1 to 2019Q4 for empirical quantile analysis. Results echoed that governance has a positive impact and environmental resources have a negative impact on energy transition across all quantiles. However, economic growth influences clean energy transition only at extremely higher quantiles (0.60–0.95), and industrialization does not have any effect on energy transition over the entire quantile range. The findings of the Granger causality analysis reveal the presence of a bidirectional causal association between clean energy transition and all the variables. Worthy policies are recommended on the basis of the findings.

Sustainability marketing strategies for the energy sector: Trends, challenges, and future directions

“…This involves expanding energy access in rural and remote areas, often through decentralized renewable energy systems, and implementing programs to improve energy affordability and reduce energy poverty. Socially inclusive energy policies also focus on public engagement and participation in energy decision-making processes, ensuring that the benefits of energy transition are widely shared and that the interests and rights of all stakeholders, including indigenous peoples and local communities, are respected and protected [133][134][135] . The relationship between sustainability and energy policies necessitates an integrated and collaborative approach transcending sectoral and disciplinary boundaries.…”

Nudging Sustainable Development: Reviewing Energy Transition and Economic Development

“…Among the four hypotheses mentioned above, the second-most applied is the feedback hypothesis [48,72,84], with a total of five research articles. This hypothesis posits a bidirectional causal relationship between energy use and economic development, suggesting that energy use and economic growth mutually influence and promote each other [25].…”

“…Additionally, continuous energy transition, increasing the share of renewable energy or enhancing energy efficiency, is not expected to have negative impacts on economic development. Studies found that economic growth only affects clean energy transition in very high quantiles (0.60-0.95) [84]. On the other hand, research in [48] indicated that energy demand does not have a feedback effect on economic growth.…”

“…Environmental governance has a positive impact on energy transition [27,38,84,112]. In the long term, effective governance helps reduce carbon dioxide emissions and enables BRICS countries to both lower emissions directly and adjust the emission-reducing effects of FDI [10].…”

“…Additionally, in economically developed areas, the transformative effect of non-agricultural income on energy transition is more pronounced. Economic growth only affects clean energy transition in a very high percentile range (0.60-0.95) [84].…”