On the asymmetric effects of financial deepening on renewable and non-renewable energy consumption: insights from China

One of the strategic objectives of China is to increase renewable energy consumption by reducing non-renewable energy consumption. This motivates us to carefully investigate the asymmetric effects of financial deepening on renewable and non-renewable energy consumption for China, using annual data from 1990 to 2019. The results show that in China, a positive shock in bank deposits and broad money has a significant increasing effect on renewable energy consumption, while a negative shock in bank deposits and broad money has also a significant increasing effect on renewable energy consumption in the long-run. Moreover, positive change in bank deposits and broad money has an inverse impact on non-renewable energy consumption, while negative change has stimulating non-renewable energy consumption in long run. Thus, government and policymaker's policies aimed at promoting financial deepening in China must be persistent and sustainable to foster renewable energy consumption.

Automated summary

The study finds that financial deepening has asymmetric effects on renewable and non-renewable energy consumption in China, with positive shocks having a significant increasing effect on renewable energy consumption and inverse impact on non-renewable energy consumption. Thus, policies aimed at promoting financial deepening in China must be persistent and sustainable to foster renewable energy consumption.