China's ambitious push towards renewable energy may actually be hindering sustainable development rather than promoting it, according to a new study from the University of Surrey.
The study, published in Energy Economics, evaluated the impact of China's Plan on Clean Energy Accommodation (PCEA) from 2018 to 2020 across 281 prefectures. Researchers from Surrey found that despite the government's intentions, the transition towards renewable energy sources has resulted in a decline in green total factor productivity (GTFP). This measure reflects a region's ability to achieve economic growth while minimising resource consumption and environmental degradation.
Professor Ali Emrouznejad, Professor and Chair in Business Analytics and co-author of the study at the University of Surrey, said:
"Our research challenges the conventional wisdom that renewable energy transition is an unequivocal good. While the shift to cleaner energy sources is essential, it is clear that the current approach is creating a short-term financial strain on local governments in China.
"The significant financial resources required for the infrastructure needed to support the renewable energy transition are crowding out government spending on research and innovation in the country. This is particularly problematic as technological advancements are crucial for achieving long-term sustainability goals. Our findings suggest that while the energy shift may contribute to cleaner energy and lower carbon intensity in the long run, the immediate consequences cannot be ignored."
Moreover, the research points to disparities among regions, indicating that southern and resource-dependent cities in China are particularly vulnerable to the adverse effects of energy transition policies. To address these issues, the study recommends that local and central governments reconsider their investment strategies. The authors argue for a model that encourages private sector involvement to alleviate financial pressures and bolster innovation in the green technology sector.
Professor Ali Emrouznejad continued:
"Our findings challenge the notion that renewable energy transition is inherently beneficial.
“The transition is vital, but we must ensure that it doesn't compromise our commitment to innovation and long-term sustainability."
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