Carbon dioxide abatement in China: Revisiting the role of renewable energy, financial development and urbanization from Quantile ARDL approach

: The current study re-investigates the link between renewable power utilization, 29 financial advancements, urbanization and carbon emanations by applying the newly introduced 30 quantile autoregressive distributed lag (QARDL) method proposed by Cho et al. (2015) in 31 Chinese economy. The framework is assessed utilizing quarterly data during the time span of 32 1970Q1-2017Q4. The outcomes confirm that the association between the variable is quantile- 33 dependent, which may uncover ambiguous outcomes in the previous research using out-dated 34 estimations that mainly focus on the mean. The outcomes of Wald-test further confirmed the 35 parameter constancy for China. Interestingly, we have found that on the one hand, renewable 36 energy utilization helps in declining the CO 2 emanations, and on the other hand, financial 37 advancement and urbanization augments the CO 2 emanations. Moreover, the causality analysis 38 results divulge the existence of bidirectional causal associations between (a) renewable power 39 and Carbon emanations, (b) financial advancements and Carbon emanations, and (c) 40 urbanization and Carbon emanations. The findings recommended that government enforcement of renewable energy implementation should entail the introduction of cleaner production processes across the industries, so the level of environmental awareness helps the citizens in identifying the ecologically sustainable utilization patterns.


Introduction
to the policy level problems regarding the alignment of the energy and urban development 94 policies, along with the industrial and banking policies. As the CO2 emissions in China can be 95 considered a consequence of the industrial development trajectory, the role of financial 96 development can never be ignored, as easy availability of credit is a boost for industrial 97 development. Once this misalignment is in place, it is difficult for the policymakers to assure 98 the availability of cost-effective green energy solution to the citizens (SDG 7), salvation of the 99 ecological quality (SDG 13), and finally, maintaining a holistic well-being by means of creating 100 vocational opportunities and thereafter, economic growth (SDG 8). Now, in order to fulfill this 101 policy-level gap prevailing in China, it is required to understand the nature of associative 102 movement between CO2 emissions, urbanization, financial development, and renewable energy 103 consumption. There lies the focus of the present study. 104 The present study analyses the association between CO2 emissions, urbanization, 105 financial development, and renewable energy consumption for China over the period of 1990-106 2017. Through this analysis, it is intended to address the policy level gap prevailing in China, 107 so that a comprehensive policy framework can be designed by encompassing the SDG 108 objectives to be addressed by China. As the policy framework to be suggested is targeted at the 109 demand and supply sides of the industrialization, therefore, the associated SDG objectives need 110 to be chosen carefully. The present study is aimed at designing a policy framework to address 111 the SDG objectives, following which the allied energy and urban development policies will be 112 aligned accordingly. Though the literature of energy and environmental economics has looked 113 into this association at various temporal and contextual domains, the aspect of policy design 114 for ascertaining sustainable development has been ignored largely, and there lies the 115 contribution of the study. Designing a multipronged SDG framework for sustaining the 116 industrial growth pattern is the first contribution of the study from the policy-designing 117 perspective. 118 Apart from the contribution in the policy design front, this study also sheds light into 119 the association from a methodological perspective. In the literature, this association has been 120 visualized from a linear perspective, while considering model parameters at their respective       {>?2 ", 1G ", 2H " , =1I " , >?2 "'( , 1G "'( , 2H "'( , =1I "'( …} and p, q, m, and n are lag orders.

337
Before QARDL model is estimated, it is highly imperative to know the order of integration of 338 the series as it gives validity for modeling QARDL. Therefore, the researcher presents the 339 Quantile unit root in Table 2 distribution. Therefore, the null hypothesis of unit root is rejected at the 5% significance level.
350 The table shows point estimates, t-statistics, and critical values for the 5% significance level. If the tstatistic is numerically smaller than the critical value, so we reject the null hypothesis of α(τ ) = one at the 5% level.

Source: Author Estimations
The evidence from Table-3   The study results for the corresponding Wald tests (Table-4   China. This outcome is imperative from the perspective of environmental sustainability policy 406 design. Also, the urbanization rate is a significant factor to be considered as our result shows 407 that it has adverse impact on the environmental sustainability in China. As indicated in Table   408 3, the urbanization rate explained 10.178 percent increases in CO2 emanation for every 1 409 percent increase in the urbanization rate in China. For the Chinese provinces, the similar

414
In order to investigate the association between the determinants of CO2 emanations and 415 CO2 emanation is presented in the Wald Test (Table-4 Table 5 showed   in the second phase, the middle and high-income households will be provided with the solutions 494 at a pro-rata rate, comparatively higher than the rate prescribed for the poor households. For 495 them, the interest rate holiday can vary from one year to two years. One this phase-wise shift 496 takes place, the loss of income from the households can be recovered from the interest income 497 received from the industries. Therefore, the nation will not have to encounter a revenue deficit 498 and consequential economic slowdown.

499
While saying this, it is also needed to remember that the policymakers need to implement 500 the renewable energy solution not only to cater to the excess energy demand but also to promote 501 cleaner production processes and encounter environmental degradation. This is where the other 502 side of the causal association comes into the picture. It has been seen that the second direction 503 of causality run from CO2 to financial advancement and urbanization. The rapid increase in the 504 CO2 emanations will have a negative impact on the hygienic state of the labor force, and it will, 505 in turn, hamper the economic growth pattern. Once the growth pattern is hit, the flow of money 506 will also be consequently hit, i.e., the financial advancement cycle will be hit. In order to have 507 control over this probable situation, the banks and financial institutions should introduce 508 discretionary credit mechanism, which will be solely dependent on the "dirtiness" of the 509 organization. By this mechanism, a dirtier organization will be charged with more rate of 510 interest, compared to a cleaner organization. This will give the industries an incentive to reduce 511 their waste, and the financial institutions should also form a legislative body for monitoring the 512 generation of waste and pollution of the organizations. In this way, financial advancement will 513 discourage not only the usage of fossil fuel-based solution but also the green energy initiatives, 514 which might bring forth more green jobs within the nation. Thereby, the living standard of the 515 urban populace will improve.

516
In order to facilitate this entire process, only the involvement of government or municipal 517 bodies won't suffice, as it requires generating awareness among the citizens regarding the 518 environmental and health concerns of fossil fuel utilization and the benefits of renewable 519 energy solutions. Therefore, the policymakers should focus on encouraging people-public-520 private partnerships in increasing the level of environmental awareness among the citizens.

521
This will help the policymakers to reach the grassroots level of implementation. In this course, 522 the nation will be able to attain certain objectives of sustainable advancement goals (SDGs), 523 namely (a) SDG 7: affordable and clean energy, (b) SDG 12: responsible utilization and 524 production, (c) SDG 13: climate action, (d) SDG 11: sustainable cities and communities, and 525 (e) SDG 8: decent work and economic growth. With the advent of renewable energy solutions 526 and following a phase-wise implementation process, clean energy will be available to the 527 citizens, and this will help in attaining the objective of SDG 7. Now, government enforcement 528 of renewable energy implementation will entail the introduction of cleaner production 529 processes across the industries, and the level of environmental awareness will help the citizens 530 in identifying the ecologically sustainable utilization patterns. It will help the nation to achieve 531 the objective of SDG 12. While both of these objectives are being fulfilled, the problem of 532 environmental degradation will come down automatically, and thereby, accomplishing the 533 objective of SDG 13. With renewable solutions and sufficient vocational opportunities in place, 534 the cities will be sustaining on clean energy and well-knit communities, which might address 535 the objective of SDG 11. Once all of these objectives are achieved, the nation can experience 536 decent economic growth, thereby satisfying the objective of SDG 8. Lastly, in order to make 537 the economic growth of a nation sustainable, the policymakers should focus on not only the 538 mere physical capital behind the economic growth but also the human capital aspect, as human 539 capital has the ability to transform the physical capital into economic benefits.