The increase in fossil fuel consumption due to the dependence of some economies on these traditional energy sources has caused harmful effects on environmental quality. More specifically, oil represented about 31% of primary energy consumption in 2019, while coal and natural gas shares were about 25.3% and 22.7%, respectively. Fossil fuels remain the primary energy source. According to British Petroleum, global direct primary energy consumption has risen substantially during the past few decades.
The exponential growth in carbon dioxide emissions due to the extensive use of fossil fuel energy is recognized as the primary source of environmental degradation. Policy makers and academics have agreed that the unprecedented climate change has severely affected environmental quality and public health. When considering the presence of structural breaks, the findings confirm the robustness of the dynamic ARDL simulations, as we conclude that fossil fuel prices positively affect renewable energy consumption only in the long run. Nevertheless, there is no evidence of significant effects in the short run. Furthermore, rising oil, coal, and natural gas prices resulted in increased renewable energy consumption in the long run, confirming that renewable energy sources can substitute fossil fuel energy only in the long run. We found strong evidence of the cointegrating relationship between the prices of all fossil fuels and renewable energy consumption. In the light of the empirical investigation, some intriguing conclusions have been drawn. To this end, we employed the novel dynamic Autoregressive Distributed Lag simulations approach. In this study, we examined whether the prices of fossil fuels, namely, oil, coal, and natural gas, have affected renewable energy consumption in China during the period 1980–2018. The past few decades have been marked by a gradual but steady increase in the reliance on renewable energy.
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