A nonparametric analysis of energy environmental Kuznets Curve in Chinese Provinces

Abstract

Energy resources are an important material foundation for the survival and development of human society, and the relationship between energy and economy is interactive and complementary. This paper analyzes the energy consumption-economic growth nexus in Chinese provinces using novel and recent nonparametric time-series as well as panel data empirical approaches. The dataset covers 30 provinces over the period of 1980-2018. The empirical analysis indicates the presence of a nonlinear functional form and smooth structural changes in most of the provinces. The nonparametric empirical analysis validates the presence of a nonlinear unit root problem in energy consumption and economic growth, and nonlinear cointegration between the variables. Additionally, the nonparametric panel cointegration test reports evidence of convergence in energy consumption and economic growth patterns across the provinces. The nonparametric regression analysis finds economic growth to have a positive effect, on average, on energy consumption in all provinces, except for Beijing. Further, the energy environmental Kuznets curve exists between economic growth and energy consumption in 20 out of 30 Chinese provinces. The Granger causality analysis reveals the presence of a mixed causal relationship between economic growth and energy consumption. The empirical findings have important implications for Chinese authorities in planning for improving energy efficiency, decoupling between economic growth and energy consumption, and reducing the environmental footprint of provinces.

Technology Innovation, Economic Growth and Carbon Emissions in the Context of Carbon Neutrality: Evidence from BRICS

“…Aruga [6] found that the energy-environmental Kuznets curve (EEKC) hypothesis occurring only in the developed countries of the Asia-Pacific region. Shahbaz et al [7] detected that EEKC exists in 20 out of 30 Chinese provinces. Similar BRICS countries are actively strengthening the top-level design of the realization path of carbon peak and carbon neutrality goals, encouraging green and low-carbon technological innovation, accelerating economic and energy structure adjustment, strictly controlling the construction of new high emission and high energy consumption projects, as well as steadily promoting the adjustment and withdrawal of stock in high pollution and high energy consumption projects.…”

“…Aruga [6] found that the energy-environmental Kuznets curve (EEKC) hypothesis occurring only in the developed countries of the Asia-Pacific region. Shahbaz et al [7] detected that EEKC exists in 20 out of 30 Chinese provinces. Similar results were found in some other studies [8,9].…”

European commitment to COP21 and the role of energy consumption, FDI, trade and economic complexity in sustaining economic growth

“…Energy consumption is a part of almost every economic activity and most social pursuits. The seminal study by Kraft and Kraft (1978) explored the connection between economic growth and energy usage, which is often manifested in four hypotheses: first, the growth hypothesis, which postulates that the use of energy produces economic growth (Kraft and Kraft, 1978;Payne, 2009, 2010); second, the conservation hypothesis suggests that the consumption of energy is determined by economic growth (Abosedra and Baghestani, 1991); third, the feedback hypothesis highlights a bi-directional relationship between energy usage and economic growth (Fallahi, 2011;Shahbaz et al, 2020); and fourth, the neutrality hypothesis argues for a noncausal relationship (Soytas et al, 2007). While the four different hypotheses postulate different approaches to the link between energy consumption and income levels, they also disprove the notion of "one size fits all" and point out that for the sake of accuracy, the connection between energy consumption and economic growth must be viewed in a particular context and in the light of moderating factors.…”

The Impacts of Conventional Energies on Environmental Degradation : Does Pakistan’s Economic and Environmental Model Follows Kuznets Curve?

“…Zhang et al (Zhang et al, 2019) showed a persistent role of construction and manufacturing industries to degrade the environment, and out of 121 countries in 95, confirmed the EKC hypothesis. Shahbaz et al (Shahbaz et al, 2020) studied 30 provinces of the Republic of China and found out that the Kuznets curve hypothesis with ushaped prevails in 20 of 30 provincial areas. Ahmed (Ahmed, 2017) in his paper concluded that in BRICS countries EKC framework existed in the economy with energy consumption and trade openness.…”