Energy efficiency and China's sustainable carbon neutrality target : evidence from novel research methods quantile on quantile regression approach.

Abstract

Since the last few decades, scholars and policy-makers have been struggling to find ways to achieve carbon neutrality target or a low carbon economy. To contribute to the existing literature regarding the said issue, this study aims to investigate whether energy efficiency could lead to achieving carbon neutrality target in the case of China. Also, this study analyses the association of economic growth to energy-related greenhouse gas emissions while using quarterly data over the period from 1990Q1 to 2014Q2. Empirical findings of the study suggest the mixed order of integration and Cointegration between economic growth, energy efficiency, and energy-related greenhouse gas emissions. This study employed a Quantile-on-Quantile regression approach

to examine the long-run association at various quantiles. The esti- mated results asserted that energy efficiency holds a weaker rela- tionship in the lower and medium quantiles, while relatively

higher association to energy-related emission in the upper quan- tiles. On the other hand, economic growth and its squared are

found significantly and highly associated with enhancing energy- related emissions in the country. Besides, the frequency domain

causality indicates a causal association running from energy effi- ciency and economic growth to energy-related greenhouse gas

emissions. This study recommends revised policies for energy effi- ciency and suggests that economic growth could be used as a remedial measure for environmental recovery by enhancing investment in the renewable energy sector, energy efficiency, and structural transformation of the industrial sector.