Original scientific paper
https://doi.org/10.1080/1331677X.2022.2093245
Research methods in economics to evaluate the role of energy efficiency and financial inclusion in achieving China’s carbon neutrality target
Bowen Luo,
Arshad Ahmad Khan,
Adnan Safi
Jin Yu
Abstract
In the recent literature, energy efficiency got the attention of
scholars due to its discouraging impact on CO2 emissions, which
is considered the most prevalent greenhouse gas that human
activities produce. Data reports that China is the leading CO2
emitting country across the globe, and still the environmental
degradation is in progress. Thus, the current paper empirically
investigates the impact of energy efficiency (ENEF), financial inclusion
(FD), GDP, export diversification (EXD), and human capital
index (HCI) on the environmental degradation of China over the
period from 1988 to 2018. This study uses various time-series
tests to empirically investigate the determinant of CO2 emissions,
including normality tests, unit root tests, and combined cointegration
tests. Besides, the long-run coefficients are analyzed via the
fully modified ordinary least square (FMOLS), dynamic OLS
(DOLS), and the Canonical Cointegrating Regression (CCR) estimators.
The empirical findings reveal that all the variables are cointegrated
in the long run. However, the coefficient estimate shows
that ENEF and HCI significantly promote environmental sustainability.
While GDP, FD, and EXD significantly promote environmental
degradation by enhancing the CO2 level in the
atmosphere. This study recommends practical policy implications
based on the empirical findings: energy-efficient products and
energy sources could be promoted.
Keywords
CO2 emission; energy efficiency; financial innovation; export diversification; human capital; canonical cointegrating regression
Hrčak ID:
304189
URI
Publication date:
31.3.2023.
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