An Empirical Research on the Relationship Between Renewable Energy Investment and Low Carbon Growth in China
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Department of Economics and Management, North China Electric Power University, Baoding, Hebei, China
Submission date: 2020-03-31
Final revision date: 2020-05-27
Acceptance date: 2020-05-31
Online publication date: 2020-10-13
Publication date: 2021-01-20
Corresponding author
XingYu Wu   

Department of Economics and Management, North China Electric Power University(Baoding), China
Pol. J. Environ. Stud. 2021;30(2):1095–1104
The aim of this paper is to investigate the relationship between renewable energy investment and economic growth in China for the period 1990-2018. The unit root test, co-integration test, vector error correction model, impulse response function analysis, and Granger causality test were employed by including intermittent variables namely foreign direct investment and carbon dioxide emissions. The empirical results indicate that there is a bi-directional long term causality between renewable energy investment and economic growth. This study implies that growing economy in China is propitious for the development of renewable energy sector which in turn helps to boost economic growth. Additionally, economic growth and foreign direct investment influence renewable energy investment in the short term. The outcome of causality test reveals a two-way Granger causal relationship from renewable energy investment to economic growth, and a one-way Granger causal relationship from foreign direct investment to renewable energy investment.