Does the development of renewable energy promote carbon reduction? Evidence from Chinese provinces

Abstract

Developing renewable energy is a crucial measure in addressing climate change and achieving carbon reduction. However, research evidence on its impact is mixed. To fill this gap, we construct a panel quantile regression model in this study to examine whether China's renewable energy development has effectively promoted a reduction in carbon emissions using panel data of 30 Chinese provinces from 2005 to 2016. The results show that: (1) Improving China's renewable energy development level is conducive to carbon emission reductions. Specifically, carbon intensity could drop by 0.084%-0.149% for every 1% increase in renewable energy generation. However, the inhibitory effect is limited due to trapped electricity as well as the fact that substituting renewable energy for fossil energy has not yet sufficiently transformed the energy consumption structure. (2) Renewable energy development has a greater impact on carbon intensity reduction in regions with high or low carbon intensity than in areas with intermediate carbon intensity. (3) The main factor in the decline in carbon intensity in China is a decrease in energy intensity. Nonetheless, the role of renewable energy in carbon reduction has increased over time.

Keywords: Carbon emissions reduction; Chinese provinces; Panel quantile regression; Renewable energy development.