Determinants of Renewable Energy Development in China

摘要

Renewable energy is an important factor in achieving a low-carbon economic development path in China. This paper investigates the long run determinants of renewable energy adoption in China. Specifically, the factors that influence the share of renewable energy in total energy consumption in China is investigated using data from 1980 to 2011 and employing the Johansen cointegration technique. The result of the analysis shows that economic growth, foreign direct investment, trade openess, financial development and the lobby of conventional energy sources significantly influence renewable energy in China. All the factors except economic growth and the lobby of conventional fossil fuel energy promotes renewable energy. The excessive obsession of the Chinese government with GDP growth over the past decades and the strong influence of conventional fossil energy sources undermine the development of renewable energy in China. To promote renewable energy, there should be deliberate effort to emphasise green economic growth, attract more foreign direct investment and facilitate trade openness, engender financial development and reduce consumption of fossil fuel.