The asymmetric nexus between energy transition and its drivers: New evidence from China

The unpredictable surge in global warming and climatic issues urges serious efforts internationally to meet the Paris Agreement to keep the global temperature below 2 °C. Therefore, a sustainable solution is necessary for the future, as most regions are still under high pollution and carbon regimes borne by traditional sources of fuels. In this context, transitioning energy resources from conventional to more clean and sustainable energy resources is a key international political agenda. This study has investigated the asymmetric relationship of energy transition and its drivers in the case of China. The study employed time series data from 1989 to 2022 and adopted the nonlinear ARDL test. Through bounds testing, this study confirmed the existence of long-run asymmetric co-integration between the policy instruments. In the long and short run, the positive shocks of environmental technology augmented the asymmetric relationship with energy transition. However, it is interesting to observe that the positive shocks of green finance and trade openness has adverse effects on energy transition in the long run. Though, in the short run, a positive shock of trade openness improves the energy transition process. This study recommends policies to help policymakers and other stakeholders attain the SDG 7 goals.