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Will fiscal decentralization stimulate renewable energy development? Evidence from China

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  • Zhang, Chenxi
  • Zhou, Dequn
  • Wang, Qunwei
  • Ding, Hao
  • Zhao, Siqi

Abstract

Carbon neutrality is a widespread target for many countries to mitigate the climate change. Clean power is expected to be the fastest-growing energy in the next decades. In this context, renewable energy development is a significant road for energy transition. Recently, more and more central governments worldwide grant relevant responsibilities of environment protection to subnational governments. This paper focuses on the impact of fiscal decentralization on renewable energy development in China, which is currently one of the largest market for renewable energy development. The results show that fiscal development has positive effects on renewable energy development. Although Chinese provinces have variety of local environmental, institutional and social conditions, the “race to the top” approach still occurs. This research reveals the role of fiscal decentralization in renewable energy development and provides important policy implications for renewable energy development considering fiscal decentralization. It fills the gap between former research and current situation of renewable energy development on different regions' devolution features. Specifically, this study takes different regions’ economic development situations and environment protection pressures into consideration. It provides implications on how to keep the balance of environment protection and economic development for different regions.

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  • Zhang, Chenxi & Zhou, Dequn & Wang, Qunwei & Ding, Hao & Zhao, Siqi, 2022. "Will fiscal decentralization stimulate renewable energy development? Evidence from China," Energy Policy, Elsevier, vol. 164(C).
    • Handle: RePEc:eee:enepol:v:164:y:2022:i:c:s0301421522001185
    DOI: 10.1016/j.enpol.2022.112893
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    6. Fuquan Zhao & Fanlong Bai & Xinglong Liu & Zongwei Liu, 2022. "A Review on Renewable Energy Transition under China’s Carbon Neutrality Target," Sustainability, MDPI, vol. 14(22), pages 1-27, November.
    7. Xiaolei Yang & Shuiying Zhong, 2022. "The Combined Effect of Environmental Policies on China’s Renewable Energy Development: A Multi-Perspective Study Based on Semiparametric Regression Model," IJERPH, MDPI, vol. 20(1), pages 1-15, December.
    8. Yinuo Wang & Fengxiu Zhou & Huwei Wen, 2023. "Does Environmental Decentralization Promote Renewable Energy Development? A Local Government Competition Perspective," Sustainability, MDPI, vol. 15(14), pages 1-18, July.
    9. Maxwell Chukwudi Udeagha & Marthinus Christoffel Breitenbach, 2023. "The Role of Fiscal Decentralization in Limiting CO2 Emissions in South Africa," Biophysical Economics and Resource Quality, Springer, vol. 8(3), pages 1-30, September.
    10. Maxwell Chukwudi Udeagha & Marthinus Christoffel Breitenbach, 2023. "Revisiting the nexus between fiscal decentralization and CO2 emissions in South Africa: fresh policy insights," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-46, December.
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