Determinants of Renewable Energy Adoption in China and India: A Comparative Analysis

Abstract

This article examines the dynamic relationships among output, carbon emission and renewable energy generation of India and China during the period 1972 to 2011 using a multivariate vector error correction model (VECM). The results for India reveal unidirectional short-run causality from carbon emission to renewable energy generation and from renewable energy generation to output, whereas in the long run, the variables have bidirectional causality. Causalities in China give a rather different scenario, with a short-run unidirectional causality from output to renewable energy and from carbon emission to renewable energy generation. In the long run, for China, unidirectional causality is found from output to renewable energy generation, while bidirectional causality is found between carbon emission and renewable energy generation.