Analysing Oil Prices Fluctuations, Carbon Emissions and Renewable Energy Trends in Uncovering the Eco-Economic Interplay in China's Trade Liberalization

Abstract

This study evaluates the factors contributing to carbon emissions in China between 2002 and 2021, considering the impact of GDP growth, shocks in oil prices, trade liberalization and energy use. Using the dynamic simulated ARDL (SARDL) model, we indicate a long-term link between trade liberalization, oil prices (WTI) shocks, GDP growth, energy use and CO₂. The novel SARDL revealed a direct relationship between trade liberalization and CO₂ in China in the long term. However, the results show a negative impact of WTI shocks on CO₂ emissions. The study suggests that renewable energy (RE) significantly and negatively affects China's CO₂ emissions. In addition, the findings conclude that, in the case of China, GDP has an insignificant long-run relationship with CO₂ emissions. The outcomes provide valuable insights for policymakers, researchers and industry stakeholders to enhance RE and promote sustainable energy practices.