Impact of renewable energy investments in curbing sectoral CO2 emissions: evidence from China by nonlinear quantile approaches

Abstract

The study analyzes the impact of renewable energy investments (RENIV) on the environment in China. In doing so, the study uses sectoral carbon dioxide (CO₂) emissions as the environment indicator, considers RENIV as the explanatory variable, includes monthly data from 2004/1 to 2020/6, runs quantile on quantile regression approach as the fundamental model, and further performs quantile regression for the controlling. The study reveals that RENIV curb CO₂ emissions in all sectors at higher levels of sectoral CO₂ emissions. Also, RENIV have a varying impact based on quantiles and sectors. Moreover, the results are robust based on the alternative approach. Thus, RENIV have a significantly decreasing impact on sectoral CO₂ emissions in China. Accordingly, China policymakers should continue to focus on providing a decrease in energy and industrial sector CO₂ emissions as the highest emitting sectors.

Keywords: China; Nonlinear quantile approaches; Renewable energy investments; Sectoral CO2 emissions.