Improvement in the environmental quality has been seen as a major concern worldwide, and a crucial agenda of the Sustainable Development Goals (SDG's). In this study, we examined the causal impacts of economic growth, financial development, nuclear energy, government stability, and socioeconomic conditions on the environmental quality of China, using quarterly data, covering the period 1984-2018. We used different proxies for environmental quality, i.e., Carbon dioxide (CO2) emissions, ecological footprints, and load capacity factor, and a unique methodology named Fourier quantile causality, recently recommended by Cheng et al. (2021), for the first time in case of China. We find that nuclear energy, and government stability are positively causing the environmental quality, while economic growth, financial development, and socioeconomic conditions are degrading the environmental quality in China, since they are linked with increased income and energy consumption. Furthermore, all the explanatory variables are largely sensitive on different quantiles to affect the environmental quality; however, economic growth is a highly causing environmental degradation. Our study suggests that increasing nuclear energy consumption along with green financial measures that simultaneously support economic growth and socioeconomic conditions can be effective tools for improving environmental quality and realizing the SDGs in China.
Keywords: China; Environmental quality; Financial development; Fourier quantile causality; Government stability; Nuclear energy; Socioeconomic conditions.
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