The role of economic policy uncertainty in the energy-environment nexus for China: Evidence from the novel dynamic simulations method. (15th August 2021)

• Record Type: Journal Article
• Authors: Amin, Azka; Dogan, Eyup
• Is Part Of: Journal of environmental management. Volume 292(2021)
• Publication Date: 2021-08-15
• Subjects: Uncertainty -- CO2 emissions -- Renewable energy -- Sustainability -- China; Environmental policy -- Periodicals; Environmental management -- Periodicals; Environment -- Periodicals; Ecology -- Periodicals; 363.705
• DOI: 10.1016/j.jenvman.2021.112865
• Languages: English
• ISSNs: 0301-4797

Abstract

Abstract: Even though a great number of researches have explored the determinants of carbon emissions, the impact of economic policy uncertainty (EPU) on the environment has not been fully investigated in the energy-environment literature. Since recent studies show a strong relationship between the external environment and uncertainty, the present study for the first time in the literature aims to explore the function of EPU in the energy-environment nexus for China by using the novel bounds testing with dynamic simulations. The empirical results indicate that increases in the real income and energy intensity contribute to environmental pollution while increases in renewable energy lower the level of emissions. Besides, an increase in EPU causes an increase in the volume of carbon emissions. As EPU increases, the government's attention to implement environmental protection policies decreases, and the execution of the environment-related strategies is likely directed in an expected way. The empirical findings suggest that the government should establish consistency in economic and environmental policies to mitigate environmental pollution and thus to reach environmental sustainability. Highlights: The role of economic policy uncertainty (EPU) on emissions is investigated for China. The novel dynamic ARDL simulations model is applied. Renewable energy consumption declines the level of emissions. The coefficient sign of EPU is positive.