Is global renewable energy development a curse or blessing for economic growth? Evidence from China

The global shift to renewable energy is conducive to carbon reduction, but its impact on the economy is still uncertain. Unlike existing research focusing on the effect of domestic renewable energy (RE), this paper considers the global RE connection among countries and examines the impact of global RE development on economic growth (EG) using China as a sample. In addition, we apply a novel wavelet-based quantile-on-quantile method, which can estimate the local influence of the α-quantile of global RE on the β-quantile of the EG in different periods. The finding shows that the upper quantiles of RE promote EG, and this effect is greater at the upper quantiles of EG in the medium- and long-term. This is mainly because China plays a leading role in RE development and has an advantage in exporting RE-related products with the development of global RE. The finding proves the growth effect, indicating that RE is a blessing for China's EG. However, in the short term, a higher level of global RE development impedes China's EG due to high upfront costs of RE production, fierce competition from other countries, and insufficient energy supply when significant investment shifts from non-renewable energy to RE. The empirical results provide important policy implications to balance RE's short-term inhibitory effect and long-term promoting effect on EG in the process of the global energy transition.