Economic Growth, Energy Intensity, and Carbon Dioxide Emissions in China

Abstract

With China's rapid economic growth over the past three decades, the emission of greenhouse gases (GHG) has become more serious to the environment, with debilitating effects on both flora and fauna. This paper mainly investigates the relationship among economic growth, energy intensity, and CO 2 emission in China using static and dynamic regressions, Granger causality, and impulse response function.The results show that by comparing the values of different energy intensities, coal consumption is the highest with mean value of 4.296, which is followed by oil (0.817), electricity (0.226), and gas (0.098). Thus, China's heavy reliance on coal consumption is possibly a dominant cause for the increase in carbon dioxide emissions. The results also indicate that CO 2 emissions have an inverted U-shaped link with per capita income, and this supports the existence of the environmental Kuznets curve (EKC) hypothesis in China. Furthermore, economic growth has a bidirectional relationship with coal energy consumption, while coal consumption also has a bidirectional link with CO 2 emissions. Based on the findings, we suggest that environmental technologies should be improved through efficiency-enhancing strategies to reduce CO 2 emissions.Finally, China's Ministry of Environmental Protection should strictly enforce existing laws and regulations on the environment, and also encourage a shift from the use of fossil fuels to clean energy sources such as ethanol gas, as well as promote the use of eco-friendly vehicles such as electric cars and motors.

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“…According to EKC hypothesis, we expect to obtain β 1 > 0 and β 2 < 0. The expected sign of β 3 is positive since energy intensity leads to higher pollution [50,66,94].…”

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