Does emerging country's urbanization redefine the environmental Kuznets hypothesis for carbon emissions? A novel perspective on national and subnational differences

Abstract

Emerging countries are experiencing rapid urbanization. Examining the link between economic growth and carbon emissions in developing nations as well as the effects of urbanization on this relationship at the national and subnational levels are the goals of this research. Thus, to investigate if China's economic development and carbon emissions align with the environmental Kuznets curve (EKC) hypothesis, this study adopts the FMOLS model and the fixed effects model. Furthermore, this study uses urbanization as a threshold variable and examines how the influence of economic development on carbon emissions would alter as a result of urbanization. The findings demonstrate an inverted U-shaped link between China's economic development and carbon emissions and the relationship is compatible with the EKC hypothesis. Although there is variability at the subnational level, most of the regions follow the inverted U-shaped connection. The carbon emissions inflection point in the western area is larger than the inflection points in the eastern and central regions. According to the threshold model, as urbanization rises, the increase in carbon emissions brought on by economic expansion declines. The eight economic areas of China differ in how the link between economic growth and carbon emissions change in the process of urbanization. But compared to the initial stage of urbanization, the last stage of urbanization in most countries lessens the impact of economic expansion on carbon emissions. To decrease carbon emissions, we must not only encourage the development of cleaner technologies and boost energy consumption efficiency, but also create carbon-reduction strategies that are specific to the growth characteristics of various areas.