A comparative perspective on the environmental sustainability of the United States and China, the two largest economies in the world

DAM M. M., Durmaz A., BEKUN F. V.

JOURNAL OF ECONOMIC AND ADMINISTRATIVE SCIENCES, 2025 (ESCI, Scopus)

Abstract

Purpose-Renewable energy is known to play an important role in achieving the sustainable development goals (SDGs). However, there is no study in the literature that addresses the environmental sustainability dimensions of globalisation and renewable energy consumption (REC) policies in achieving the SDGs in China and the United States (US), the two largest economies in the world, by comparing the two countries. Design/methodology/approach-With this motivation, this study examines the impact of RECs and globalisation on environmental sustainability in China and the US using annual data for the period 1970-2022 and introduces a new perspective by testing the Inverted Load Capacity Factor (ILCF). Findings-Our results suggest that (1) a 1% increase in RECs contributes to environmental sustainability by similarly reducing US and China ILCFs, (2) economic growth is about twice as likely to reduce environmental quality in China as in the US; (3) globalisation improves environmental quality in the long run in both the US and China and (4) there is a unidirectional causal relationship between REC and ILCF in the US and China and the direction of this relationship. These findings will help policymakers in these two giant economies, at different stages of development, to develop strategies for environmental sustainability. Originality/value-The present study contributes to the extant literature on energy and environment while it introduces a new perspective by testing the ILCF.