CO2 emissions, energy consumption and economic growth in China: A panel data analysis

CO2 emissions, energy consumption and economic growth in China: A panel data analysis

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Article ID: iaor20117798
Volume: 39
Issue: 9
Start Page Number: 4870
End Page Number: 4875
Publication Date: Sep 2011
Journal: Energy Policy
Authors: , , ,
Keywords: economics, government, statistics: inference
Abstract:

This paper examines the causal relationships between carbon dioxide emissions, energy consumption and real economic output using panel cointegration and panel vector error correction modeling techniques based on the panel data for 28 provinces in China over the period 1995–2007. Our empirical results show that CO2 emissions, energy consumption and economic growth have appeared to be cointegrated. Moreover, there exists bidirectional causality between CO2 emissions and energy consumption, and also between energy consumption and economic growth. It has also been found that energy consumption and economic growth are the long‐run causes for CO2 emissions and CO2 emissions and economic growth are the long‐run causes for energy consumption. The results indicate that China's CO2 emissions will not decrease in a long period of time and reducing CO2 emissions may handicap China's economic growth to some degree. Some policy implications of the empirical results have finally been proposed.

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