Environmental Kuznets Curve Hypothesis on CO2 Emissions: Evidence for China

Abstract

China is the largest CO2 emitter in the world, and it shared 28% of the global CO2 emissions in 2017. According to the Paris Agreement, it is estimated that China’s CO2 emissions will reach its peak by 2030. However, whether or not the CO2 emissions in China will rise again from its peak is still unknown. If the emission level continues to increase, the Chinese policymakers might have to introduce a severe CO2 reduction policy. The aim of this paper is to conduct an empirical analysis on the long-standing relationship between CO2 emissions and income while controlling energy consumption, trade openness, and urbanization. The autoregressive distributed lag (ARDL) model and the bounds test were adopted in evaluating the validity of the Environmental Kuznets Curve (EKC) hypothesis. The quantile regression was also used as an inference approach. The study reveals two major findings: first, instead of the conventional U-shaped EKC hypothesis, there is the N-shaped relationship between CO2 emissions and real gross domestic product (GDP) per capita in the long run. Second, a positive effect of energy consumption and a negative effect of urbanization on CO2 emissions, in the long run, are also estimated. Quantitatively, if energy consumption rises by 1%, then CO2 emissions will increase by 0.9% in the long run. Therefore, the findings suggest that a breakthrough, in terms of policymaking and energy innovation under China’s specific socioeconomic and political circumstances, are required for future decades.

Testing the Environmental Kuznets Curve Hypotheses in Chinese Provinces: A Nexus between Regional Government Expenditures and Environmental Quality

“…The first—difference GMM approach—is the benchmark and the main method used. We utilized the (FMOLS) approach to evaluate the estimations’ robustness and confirm our hypothesis of the N-shaped EKC hypothesis for the total sample, the 31 China provinces [ 52 ]. In addition, the results of the three tests demonstrated the existence of an inverse relationship in the form of an N-shaped EKC hypothesis; we further discuss the result below [ 53 ].…”

Assessing the moderating effect of institutional quality on economic growth—carbon emission nexus in Nigeria

“…Zhang ( 2021 ) among others, who found the existence of an N-shaped nexus between pollution and income in China, identified three stages in the growth of income that gave birth to the N-shaped nexus. They are the scale effect, where the government pays attention to the growth of income, employment and production while neglecting the environmental and conservation policies; the compositional and technical effects, where the government now focuses on reducing the pollution level; and the technological obsolescence effects, where the technological effects that take the form of innovations have reached its maximum limit, thereby leading to scale effects outweighing the technical effects, and bringing about further deteriorations in the environment with the increase in income.…”

Investigating the potential role of innovation and clean energy in mitigating the ecological footprint in N11 countries

“…The results were miscellaneous and indecisive. While some studies found a positive relation between economic progress and environmental deterioration, other studies found a negative or insignificant relation between economic progress and environmental deterioration; as an illustration, the analyses of Azomahou et al (2006), Poudel et al (2009, Saboori et al (2012), Wang (2012), Kasperowicz (2015), Bimonte and Stabile (2017), Lu (2017), Storm and Schröder (2018), Zhang et al (2019), Jiang et al (2020) and Zhang (2021).…”