China is the world's largest fossil fuel consumer and carbon emitter country. In September 2020, China pledged to reduce carbon emissions, and achieve carbon neutrality by 2060. Therefore, this study aimed to contribute to the literature and show the pictorial nexus of bioenergy and fossil fuel consumption, carbon emission, and agricultural bioeconomic growth, a new pathway towards carbon neutrality. For this study, time-series data from 1971 to 2019 were used to analyze the autoregressive distributed lag (ARDL) bound testing and novel dynamic autoregressive distributed lag (DYNARDL) simulation models. Initially, the unit root tests results showed that all variables were stationarity at the level and first difference. The presence of cointegration between selected variables was confirmed by the results from ARDL bound test. In addition, the results of long-run and short-run nexus show an increase in bioenergy consumption that caused an increase in agricultural bioeconomic growth both in the long and short-run nexus. A decrease in fossil fuel consumption was shown to result in increased agricultural bioeconomic growth with respect to both long- and short-term effects. Furthermore, the results of the novel dynamic ARDL simulation model demonstrated that a 10% positive shock from bioenergy consumption caused an increase in agricultural bioeconomic growth, while at the same time, a 10% negative shock in bioenergy consumption led to a decrease. A 10% negative shock from fossil fuels caused an increase in agricultural bioeconomic growth, whereas a 10% positive shock from fossil fuels led to a decrease. Therefore, this study suggests that China needs to switch from fossil fuel and other non-renewable energy consumption to sources of bioenergy and other renewable energy consumption to achieve carbon neutrality by 2060.
Keywords: Agricultural bioeconomic growth; Bioenergy consumption; Carbon emission; Carbon neutrality; Fossil fuel.
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