China’s path between carbon and clean energy: empirical insights from the Kuznets curve framework

Purpose Environmental sustainability, which is among the most important goals of sustainable development, is a globally debated issue. In this study, China, which is among the major environmental polluters on a global scale, has been examined in depth. The high growth rates and high energy consumption of the Chinese economy provide an important research framework. In this context, the validity of the Environmental Kuznets Curve (EKC) and Renewable Energy Kuznets Curve (RKC) hypotheses has been investigated. The main purpose of the study is whether environmental degradation or renewable energy increase occurs first with increasing income in China. Design/methodology/approach Two empirical analyzes were conducted for the period 1990–2022 for China with the help of CO2 emissions, renewable energy, income, trade openness and urbanization variables. In the study where Augmented ARDL analysis was used, short-term causal relationships were measured with the Fourier Toda-Yamamoto causality test. Findings According to the results obtained by calculating the turning points for the EKC and RKC hypotheses in two different models, the RKC turning point occurs before the EKC. These results provide important evidence that income growth in China can increase environmental quality before environmental degradation. These results, especially for China, a heavily polluting country, provide important policy insights for global economies. Originality/value The RKC hypothesis, which argues the opposite of the inverted U hypothesis put forward by the EKC hypothesis, is quite new. In addition, to the best of the authors’ knowledge, there is no study on China where the EKC and RKC hypotheses are used together and considered within the framework of robustness testing. The main motivation in the study is the question of whether environmental degradation or renewable energy increase occurs first with increasing income in China. The answer to this question, which is thought to contribute to the literature, reveals the validity of the EKC and RKC hypotheses and the environmental consequences of income.