Causes of the Negative Impact of Non-renewable Energy on the GDP of China
The use of non-renewable energy in China has the negative impact on the GDP, as indicated by the negative values of DOLS and CCR coefficients. Non-renewable energy is associated with the release of significant quantities of greenhouse gases (Aneja et al., 2017). China uses large amounts of funds to manufacture and install the systems for the capture and storage of carbon (CCS), and this reduces the national revenue. The general set-up of coal mining or crude oil extraction sites is also capital-intensive, hence, the margin between initial investment and returns from the extraction of non-renewable energy is reduced.
The extraction and utilization of petroleum products also release significant amounts of greenhouse gases, which further pollute other systems of the environment such as water bodies and the atmosphere (Marinaş et al., 2018). The long-term inhalation of greenhouse gases and the consumption of food substances that have been polluted by the gases cause serious health problems among the Chinese population. Poor health reduces the labor productivity of the Chinese population, hence leads to a lower GDP.
Causes of the Positive Impact of Non-renewable Energy on the GDP of China
The use of renewable energy in China has a positive impact on the GDP, as shown by the positive values of DOLS and CCR coefficients. The installation of sites for the extraction of renewable energy is capital-intensive, but the operations and maintenance costs are comparatively low (Aneja et al., 2017). The revenue generated from renewable energy is, therefore, higher than that of non-renewable energy, hence an increased GDP. The generation of renewable energy has a negligible negative impact on the environment and human health (Singh et. al, 2019). This creates a conducive environment for executing economic activities.
References
Aneja, R., Banday, U., Hasnat, T., & Kocoglu, M. (2017). Renewable and non-renewable energy consumption and economic growth: Empirical evidence from the panel error connection model. Jindal Journal of Business Research, 6(1), 76-85. Web.
Marinaş, M., Dinu, M., Socol, A., & Socol, C. (2018). Renewable energy consumption and economic growth. Causality relationship in Central and Eastern European countries. PLoS ONE, 13(10). Web.
Singh, N., Nyuur, R., & Richmond, B. (2019). Renewable Energy development as a driver of economic growth: Evidence from multivariate panel data analysis. Sustainability, 11(8). Web.