CO2, economic growth, and energy consumption in China's provinces: Investigating the spatiotemporal and econometric characteristics of China's CO2 emissions

Abstract

This study addresses the spatiotemporal variations at play in China's CO2 emissions, based on an estimation of emission levels in the period 1995–2012 and an provincial analysis of the relationship of CO2 emissions to economic growth and energy consumption. Using a series of econometric models and data on the combustion of fossil fuels and cement manufacturing, the study first estimated CO2 emission levels during the study period, exploring their spatiotemporal pattern. The results indicate that both China's total and its per capita CO2 emissions have increased significantly over the study period, with both measures evidencing a similar evolution (albeit one that is characterized by noticeable regional discrepancies at the provincial level and which displays properties of convergence). From a geographical perspective, we found both total and per capita CO2 emissionsto be higher in China's eastern region than in the country's central and western regions. Panel data analysis was subsequently undertaken in order to quantify the dynamic casual relationship between economic growth, energy consumption, and CO2 emissions. The empirical results indicated that the variables were in fact cointegrated and exhibited a long-run positive relationship. The results of further Granger causality tests indicated the existence of a bidirectional positive causality between economic growth and energy consumption, as well as between energy consumption and CO2 emissions, and a unidirectional positive causality running from economic growth to CO2 emissions. The findings of this study suggest that China is, in the long run, dependent on carbon energy consumption for its rapid economic growth, a dependency which is the cause of considerable increases in CO2 emissions. China should therefore make greater efforts to develop low-carbon technologies and renewable energy, and improve energy efficiency in order to reduce emissions and achieve green economic growth.