IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v18y2025i8p2089-d1637377.html

The Urban Renewable Energy Transition: Impact Assessment and Transmission Mechanisms of Climate Policy Uncertainty

Author

Listed:
  • Da Gao

    (School of Law and Business, Wuhan Institute of Technology, Wuhan 430205, China)

  • Tianyi Zhang

    (School of Law and Business, Wuhan Institute of Technology, Wuhan 430205, China)

  • Xiaowei Liu

    (School of Law and Business, Wuhan Institute of Technology, Wuhan 430205, China)

Abstract

The transition to renewable energy is a critical pathway for achieving low-carbon development and addressing global climate change problems. Therefore, we expand the conventional province-level energy balance table to the urban level, providing a refined assessment tool for evaluating renewable energy transition (RET). This study investigates the impact of climate policy uncertainty (CPU) on urban RET and explores the underlying mechanisms. The findings reveal that CPU significantly inhibits urban RET, with this effect being particularly pronounced in non-capital and inland cities. The mechanisms through which CPU hinders urban RET include exacerbating capital and labor misallocation and suppressing industrial structure upgrading. Furthermore, the moderation model indicates that high-intensity government supervision and low public environmental awareness exacerbate the negative impact of CPU on urban RET. Our findings provide governments with adopting forward-looking climate policies to mitigate the adverse effects of urban renewable energy transition.

Suggested Citation

  • Da Gao & Tianyi Zhang & Xiaowei Liu, 2025. "The Urban Renewable Energy Transition: Impact Assessment and Transmission Mechanisms of Climate Policy Uncertainty," Energies, MDPI, vol. 18(8), pages 1-18, April.
  • Handle: RePEc:gam:jeners:v:18:y:2025:i:8:p:2089-:d:1637377
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/18/8/2089/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/1996-1073/18/8/2089/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chang, Chiu-Lan & Zhang, Jiahui & Lin, Yu-En, 2024. "Climate policy uncertainty, corporate social responsibility and corporate investments of the energy firms," Energy Economics, Elsevier, vol. 140(C).
    2. Allan Hsiao, 2025. "Coastal investment in the age of climate change," Nature Climate Change, Nature, vol. 15(4), pages 352-353, April.
    3. Reyer Gerlagh & Thomas Michielsen, 2015. "Moving targets—cost-effective climate policy under scientific uncertainty," Climatic Change, Springer, vol. 132(4), pages 519-529, October.
    4. Da Gao & Linfang Tan & Yue Chen, 2025. "Smarter is greener: can intelligent manufacturing improve enterprises’ ESG performance?," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-12, December.
    5. Mehmood, Usman, 2021. "Contribution of renewable energy towards environmental quality: The role of education to achieve sustainable development goals in G11 countries," Renewable Energy, Elsevier, vol. 178(C), pages 600-607.
    6. Scott R. Baker & Nicholas Bloom & Steven J. Davis, 2016. "Measuring Economic Policy Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(4), pages 1593-1636.
    7. Huynh, Cong Minh & Phan, Thi Nga, 2024. "Climate change and income inequality: Does renewable energy matter?," Renewable Energy, Elsevier, vol. 233(C).
    8. Jia, Huanyu & Lin, Boqiang, 2025. "Does public satisfaction with government environmental performance promote their participation in environmental protection?," Socio-Economic Planning Sciences, Elsevier, vol. 98(C).
    9. Huo, Dongxia & Bagadeem, Salim & Elsherazy, Tarek Abbas & Nasnodkar, Siddhesh Prabhu & Kalra, Akash, 2023. "Renewable energy consumption and the rising effect of climate policy uncertainty: Fresh policy analysis from China," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1459-1474.
    10. Barnea, Gil & Hagemann, Christian & Wurster, Stefan, 2022. "Policy instruments matter: Support schemes for renewable energy capacity in worldwide comparison," Energy Policy, Elsevier, vol. 168(C).
    11. Ai, Hongshan & Tan, Xiaoqing & Mangla, Sachin Kumar & Emrouznejad, Ali & Liu, Fan & Song, Malin, 2025. "Renewable energy transition and sustainable development: Evidence from China," Energy Economics, Elsevier, vol. 143(C).
    12. Leng, Tiecheng & Liu, Ying & Xiao, Yi & Hou, Chunxiao, 2023. "Does firm financialization affect optimal real investment decisions? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    13. Yi, Hong & Hao, Ling & Liu, Aoran & Zhang, Ziyu, 2023. "Green finance development and resource efficiency: A financial structure perspective," Resources Policy, Elsevier, vol. 85(PA).
    14. Zhang, Xinmin & Wang, Miao & Zang, Hong, 2025. "Renewable energy technology innovation, climate risk, and carbon emission reduction: A cross-country analysis," Renewable Energy, Elsevier, vol. 240(C).
    15. Ullah, Atta & Nobanee, Haitham & Ullah, Saif & Iftikhar, Huma, 2024. "Renewable energy transition and regional integration: Energizing the pathway to sustainable development," Energy Policy, Elsevier, vol. 193(C).
    16. Severin Borenstein & James Bushnell & Frank A. Wolak & Matthew Zaragoza-Watkins, 2019. "Expecting the Unexpected: Emissions Uncertainty and Environmental Market Design," American Economic Review, American Economic Association, vol. 109(11), pages 3953-3977, November.
    17. Li, Zheng Zheng & Su, Chi-Wei & Moldovan, Nicoleta-Claudia & Umar, Muhammad, 2023. "Energy consumption within policy uncertainty: Considering the climate and economic factors," Renewable Energy, Elsevier, vol. 208(C), pages 567-576.
    18. Da Gao & Linfang Tan & Yue Chen, 2025. "Unlocking Carbon Reduction Potential of Digital Trade: Evidence from China’s Comprehensive Cross-border E-Commerce Pilot Zones," SAGE Open, , vol. 15(1), pages 21582440251, February.
    19. Xi, Yue & Huynh, Anh Ngoc Quang & Jiang, Yushi & Hong, Yanran, 2023. "Energy transition concern: Time-varying effect of climate policy uncertainty on renewables consumption," Technological Forecasting and Social Change, Elsevier, vol. 192(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yan Huang & Yang Feng & Da Gao & Jiawen Wei & Kai Wu, 2025. "The Power of Knowledge: How Can Educational Competitiveness Improve Urban Energy Efficiency?," Sustainability, MDPI, vol. 17(14), pages 1-20, July.
    2. Zhou, Xijin & Lin, Deqin, 2025. "Impact of the environmental protection law on corporate biodiversity risk attention - An empirical analysis based on data of Chinese listed companies," Finance Research Letters, Elsevier, vol. 86(PE).
    3. Jiacheng Zou & Kun Hou & Xia Xu & Zhen Wang, 2025. "Evaluation on the Rationality of Spatial Layout of Social Facilities in Inland Coastal Cross-River Cities Based on POI Data: A Case Study of Nanjing, China," Sustainability, MDPI, vol. 17(17), pages 1-25, August.
    4. Da Gao & Qingshuo Wang & Qingjiang Han, 2025. "How Does Critical Peak Pricing Boost Urban Green Total Factor Energy Efficiency? Evidence from a Double Machine Learning Model," Energies, MDPI, vol. 18(18), pages 1-21, September.
    5. Wei, Wenwan & Yang, Sini, 2025. "Study on the factors and paths of optimizing and upgrading the regional industrial structure: A hybrid analysis based on extended NCA and fsQCA," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 2083-2102.
    6. Shuying Chen & Da Gao & Linfang Tan, 2025. "Green Finance Reform: How to Drive a Leap in the Quality of Green Innovation in Enterprises?," Sustainability, MDPI, vol. 17(15), pages 1-27, August.
    7. Mateusz Ciski & Krzysztof Rząsa, 2025. "The Environmental Dimension of Sustainable Development in Relation to the Transition from Brown to Green Energy—A Case Study of Poland from 2005 to 2023," Energies, MDPI, vol. 18(11), pages 1-28, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhao, Chen & Yu, Jian & Liu, Peng & Shen, Bo, 2026. "Climate policy uncertainty and firm decarbonization challenge: Insights from energy transition and technological innovation," International Review of Financial Analysis, Elsevier, vol. 109(C).
    2. Payne, James E. & Nazlioglu, Saban & Koncak, Ahmet & Ewing, Bradley T., 2025. "U.S. climate policy uncertainty shocks and the growth in renewable energy production," Journal of Commodity Markets, Elsevier, vol. 39(C).
    3. Liu, Yang & Zhao, Congyu & Kong, Zhaoyang & Taghizadeh-Hesary, Farhad, 2025. "Pathways to stable economic policy: The role of industrial robotics and energy transition," Renewable Energy, Elsevier, vol. 244(C).
    4. Chen, Juan & Xiao, Zuoping, 2025. "Is the business cycle getting hit by climate policy uncertainty in China?," Finance Research Letters, Elsevier, vol. 71(C).
    5. Wang, Yu & Cheung, Adrian (Wai Kong) & Yan, Wanlin & Wang, Bin, 2024. "Green bond and green stock in China: The role of economic and climate policy uncertainty," The North American Journal of Economics and Finance, Elsevier, vol. 74(C).
    6. Tian, Lihui & Li, Xin & Lee, Cheng-Wen & Spulbăr, Cristi, 2024. "Investigating the asymmetric impact of artificial intelligence on renewable energy under climate policy uncertainty," Energy Economics, Elsevier, vol. 137(C).
    7. Da Gao & Xiaotian Zhou & Xiaowei Liu, 2024. "The Bright Side of Uncertainty: The Impact of Climate Policy Uncertainty on Urban Green Total Factor Energy Efficiency," Energies, MDPI, vol. 17(12), pages 1-15, June.
    8. Zhang, Jiahao & Zhang, Yifeng & Wei, Yu & Wang, Zhuo, 2024. "Normal and extreme impact and connectedness between fossil energy futures markets and uncertainties: Does El Niño-Southern Oscillation matter?," International Review of Economics & Finance, Elsevier, vol. 89(PB), pages 188-215.
    9. Sun, Yanpeng & Song, Yuru & Long, Chi & Qin, Meng & Lobonţ, Oana-Ramona, 2023. "How to improve global environmental governance? Lessons learned from climate risk and climate policy uncertainty," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1666-1676.
    10. Shah, Asad Abbas & Zha, Donglan, 2025. "Economy-wide estimates of the energy rebound effect in BRICS: The role of environmental regulations and economic policy uncertainty," Energy, Elsevier, vol. 320(C).
    11. Zhao, Shikuan & Boubaker, Sabri & Hunjra, Ahmed Imran & Yang, Ping, 2025. "Impact of energy restructuring on green technology innovation in the context of climate policy uncertainty," Emerging Markets Review, Elsevier, vol. 69(C).
    12. Su, Chi-Wei & Yang, Shengyao & Dumitrescu Peculea, Adelina & Ioana Biţoiu, Teodora & Qin, Meng, 2024. "Energy imports in turbulent eras: Evidence from China," Energy, Elsevier, vol. 306(C).
    13. Rangan Gupta & Christian Pierdzioch, 2024. "Climate Policy Uncertainty and Financial Stress: Evidence for China," Working Papers 202428, University of Pretoria, Department of Economics.
    14. Aamir Javed & Mahjabeen Usman & Nabila Abid & Agnese Rapposelli, 2025. "Unveiling the impact of geopolitical risk, climate policy uncertainty, environmental policy stringency, and financial efficiency on renewable energy investment in the USA: Evidence from novel dynamic simulated ARDL approach," Post-Print hal-05235793, HAL.
    15. Feng, Yanhong & Liu, Fei & Liu, Hongbo & Xuan, Linlin, 2025. "How does climate policy uncertainty affect the investment efficiency of energy firms?," Finance Research Letters, Elsevier, vol. 86(PE).
    16. Zhao, Congyu & Zhai, Xuan & Tao, Miaomiao & Che, Shuai, 2024. "Enlarged scars: The effects of economic policy uncertainty on electricity accessibility and urban-rural disparity," Utilities Policy, Elsevier, vol. 91(C).
    17. Eren Erkılıç & Cengiz Gazeloğlu & Ece Özgören Ünlü, 2025. "Renewable Energy Solution to Carbon Emissions: BRICS Countries in the Grip of Globalization and Economic Growth," Sustainability, MDPI, vol. 17(9), pages 1-24, May.
    18. Liu, Zhiyang & Xie, Yaoshu, 2026. "Spillover effect of climate policy uncertainty, global climate risk and energy price index in major countries based on quantile VAR," International Review of Economics & Finance, Elsevier, vol. 105(C).
    19. Jia, Huizhen, 2025. "Dynamic connection between climate risks and energy markets," International Review of Financial Analysis, Elsevier, vol. 102(C).
    20. Ren, Xiaohang & Fu, Chenjia & Tao, Lizhu & Yuan, Li & Xu, Ziyue, 2025. "Financialization trends and climate policy uncertainty: Implications for China’s nonferrous metal market," Research in International Business and Finance, Elsevier, vol. 77(PA).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:18:y:2025:i:8:p:2089-:d:1637377. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager The email address of this maintainer does not seem to be valid anymore. Please ask MDPI Indexing Manager to update the entry or send us the correct address (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.