Impacts of renewable energy, trade globalization, and technological innovation on environmental development in China: Evidence from various environmental indicators and novel quantile methods

Abstract

This study analyzes the impact of renewable energy (REN), trade globalization (GLO), and technological innovation (TEI) on environmental quality in China. In doing so, the study considers carbon dioxide (CO2) emissions, ecological footprint (ECF), and load capacity factor (LCF) as environmental indicators. The study uses a quarterly dataset between 1990/Q1 and 2020/Q4 and applies novel quantile-on-quantile regression, nonparametric causality in quantiles, and quantile regression methods. The results report that at higher quantiles: (i) REN decreases CO2 emissions and ECF while stimulating LCF; (ii) GLO increases CO2 emissions and ECF while decreasing LCF; (iii) TEI increases CO2 emissions and ECF at higher quantiles, whereas it decreases LCF at middle quantiles; (iv) the causal effects vary according to changes in the mean and variance. The results show that REN, GLO, and TEI have environmental effects that vary according to environmental indicators and quantiles (levels). It can be concluded that REN, GLO and TEI are significant estimators of environmental quality in China. Accordingly, various policy options for developing environmental quality in China are discussed (e.g., increasing support for RE, channeling trade globalization in a positive direction to reduce negative impacts by allowing the import of environmentally friendly technologies, and managing technological innovations in a more environmentally friendly manner).