In collaboration with a researcher Saliminezhad from Department of Economics, Near East University, a study undertook a comprehensive re-evaluation of the causal relationships between clean energy consumption and economic growth in China, a pivotal player in global climate initiatives. Previous research on this subject has been criticized for lacking methodological rigor, leading to inconclusive findings. Therefore, this study aimed to address this gap by employing a more robust analytical approach spanning from 1965 to 2020.
Distinguishing itself from prior studies, this research utilized a time-varying framework that accommodates parameter instability, enhancing the reliability of the analysis. Despite conventional Granger causality tests failing to detect significant causal links between the variables, the study uncovered substantial time variation in these relationships, underscoring the limitations of static frameworks in drawing reliable inferences.
The dynamic analysis revealed diverse forms of causality flows across different subperiods, offering valuable insights for policymakers. These findings provide China with a dependable basis for pursuing its ambitious carbon neutrality targets, as understanding the evolving dynamics between clean energy consumption and economic growth is crucial for informed decision-making.
Moreover, the study underscores the importance of employing time-varying causality tests to mitigate the risk of misleading conclusions. By acknowledging the temporal variability of causal relationships, policymakers can adopt more nuanced and effective strategies for sustainable development and climate action.
This study represents a significant advancement in understanding the complex interplay between clean energy consumption and economic growth in China. By embracing a more sophisticated analytical approach, the research contributes to the body of knowledge informing evidence-based policy formulation and underscores the imperative of dynamic analysis in navigating the complexities of sustainable development and environmental stewardship.
More Information:
https://www.degruyter.com/document/doi/10.1515/snde-2020-0136/html
