Does Environmental Decentralization Promote Renewable Energy Development? A Local Government Competition Perspective

Abstract

Renewable energy development is a long-term means of addressing the climate challenge and achieving environmental sustainability. This study examines the relationship between environmental decentralization, local government competition, and renewable energy production using panel data from 30 Chinese provinces from 2000 to 2021. The empirical results show that environmental decentralization significantly inhibits renewable energy development, indicating a lack of foresight among local governments in environmental governance issues. In addition, local government competition amplifies the detrimental effects of environmental decentralization on renewable energy production. Although the decentralization of environmental administrative power hinders renewable energy production, the decentralization of environmental monitoring power promotes it. However, insufficient evidence is available to conclude that regional characteristics and threshold variables can alter the inhibitory effect of environmental decentralization on renewable energy production, even though the effects of environmental decentralization on the production of renewable energy exhibit geographical variation and non-linear characteristics. The findings of this study contribute to optimizing environmental policies to motivate local governments to pursue long-term environmental governance goals.