Trilemma of capital, urbanization, and renewable energy: contextual evidence from China

In the case of China, there is a need of green energy system to boost growth and environment. However, the current growth of urbanization is putting high pressure on energy system through financial capital. Hence, it is a need to develop such path through renewable energy consumption, capital development, and urbanization to enhance the performance of development and environment. Therefore, this paper contributes to the literature by adding the asymmetries between renewable energy, urbanization, economic growth, and capital investment by covering the period from 1970 to 2021. For this purpose, we apply the nonlinear autoregressive distributed lag model to find the nonlinearities between the variables under study. The findings confirm the asymmetric short- and long-term relationships between the variables. In this sense, capitalization shows the short- and long-term asymmetric impacts on renewable energy consumption. In addition, urbanization and economic growth have long-term asymmetric and positive impacts on renewable energy consumption. At last, this paper provides applicable and practical policy implications for China.