Is renewable energy effective in promoting local economic development? The case of China

Study on how renewable energy use and economic growth interact with each other has been an active area of research. This study examines the impacts of renewable energy production (and consumption) on local economic development and income, for a panel data of the 31 provinces of China over the period 2000-2010 within a multivariable framework. Using regression with panels corrected standard errors, this study investigates the effects of renewable energy use on provincial real gross domestic production and local rural income. It is found that deployment of renewable energy use in rural areas has shown significant positive effects on income increase of rural households. But in general, most renewable energy use has negative impacts on economic growth except hydro power generation, improving the economic efficiency of renewable energy production and adjusting renewable energy related subsidy policies are of prime importance.