Revesting the spatial spillover effects of renewable energy in curbing carbon emissions: Evidence from China

Abstract

Renewable energy is fundamental to achieving China's peak carbon and carbon neutrality targets. Despite the extremely rapid growth in the share of renewable energy generation in terms of provincial-level regions, the impact of renewable energy generation on carbon emission reduction and whether this association is spatially correlated have not been fully recognized. To address this issue, this paper explores the spatial impact effect of renewable energy applications on carbon emissions using Chinese provincial panel data from 1990 to 2020 and a multi-panel spatial econometric model. The results show that the contribution of emission reduction mainly comes from the provincial clean energy mix, while the exclusion of out-of-province power plants also helps to curb their carbon emissions. In addition, in the context of large-scale penetration of renewable energy, grid infrastructure for cross-provincial power trading will contribute to cross-provincial emission reduction. Regulators should take measures to promote coordination of emission reduction policies among provinces in a unified national carbon market, rather than simplifying the allocation of responsibilities in provincial markets. Based on the findings of this paper, there is a need to rationalize and optimize the geospatial distribution of renewable energy projects in the future, so as to maximize the potential of renewable energy to contribute to carbon emission reduction.