The Role of Economic Growth in the Validation of Environmental Sustainability: New Evidence from the Inverted Load Capacity Factor and Renewable Energy Indicators

Öz

China, which has been making economic reforms since the 1980s, has become an important actor on a global scale with high growth rates. These developments occurred with the opening up policies, industrialisation, and technological enhancement. However, China is still the most polluting country according to ecological footprint measurement. Therefore, it is essential to determine the factors causing environmental degradation in China and to take new measures. This study investigates environmental sustainability within the framework of the Inverted Load Capacity Factor Curve (ILCC) and Renewable Energy Kuznets Curve (RKC) hypotheses. Empirical analyses are conducted with the Inverted Load Capacity Factor (ILCF), economic growth, renewable and non-renewable energy, trade openness, and urbanisation for the period 1990-2022 for China. The non-linear methodology was used in this study. In this context, the co-integration method developed by Hepsağ (2021) is used to investigate the ILCC and RKC hypotheses. The FMOLS estimator is also used as a robustness test. The Fourier Toda-Yamamoto causality analysis implies short-term causal associations. Empirical findings showed that the ILCC and RKC hypotheses are valid for China. Moreover, the RKC inflection point occurred before that of the ILCC. These results provide significant evidence that income growth in China can increase environmental quality before environmental degradation.

Anahtar Kelimeler

• Renewable Energy
• Economic Growth
• Inverted Load Capacity Factor

Kaynakça

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