Effects of the energy transition on China's economic sustainability

Optimizing energy transition policies while considering economic sustainability has been a crucial research topic. However, it is difficult to build a quantitative model to identify the relationship between energy transition and the regime-switching process from an "unsustainable regime" to a "sustainable regime." Here, we construct a dynamic stochastic general equilibrium model embedded in economic sustainability and energy transition while relaxing the assumption of "zero emissions" of renewable energy. This model can evaluate when qualitative regime changes occur, changes in the maximum degree of economic unsustainability, and differences in system responses to different energy strategies. Applying this model to China, we find that the country is currently in an unsustainable regime and is expected to switch to a sustainable regime due to energy transition by 2030. Importantly, we find that the path-dependent and proactive energy strategies have asymmetric effects on the regime-switching process. These findings can provide a basis for optimizing China's energy transition, and the model can be extended to related research in major carbon-emitters.