Investigating the role of good governance system in renewable energy transition in China and USA

Abstract

Governance system cannot be neglected in the fight against global warming. However, there is a significant gap in the literature on addressing how a good governance system can help facilitate a renewable energy transition, as previous studies are centered on governance system and carbon emissions, and there are limited comparative studies. Therefore, this study addresses the gap by investigating the impact of a good governance system on renewable energy transition in China and the USA. The study employs the Fully Modified Ordinary Least Squares and the Two-Stage Least Squares for the estimations. The results are grouped into two categories: the first category covers two decades and the second category is divided into two sub-periods thus 2002-2012 and 2013-2022. The results reveal that a good governance system positively affects renewable energy transition in China and a negatively affects renewable energy transition in the USA. With the sub-periods, a good governance system has no effect in both periods in China, and negative effect in the 2002-2012 period in the USA on renewable energy transition. Based on the findings of the study, governance restructuring is recommended to empower public participation in the renewable energy transition.

Keywords

• Good governance system
• Renewable energy transition
• Economic growth
• Foreign direct investment
• Financial development