Dynamic relationship among agriculture-energy-forestry and carbon dioxide (CO2) emissions: empirical evidence from China.

Abstract

This study aims to explore the dynamic association among crop production, livestock production, power consumption in agriculture, forest area, and carbon dioxide (CO2) emissions. Based on the annual data of China, spanning the period 1990 to 2016, the study applied the auto-regressive distributed lag (ARDL) bounds testing approach. In addition, the fully modified ordinary least squares (FMOLS) canonical cointegration regression (CCR) and the Granger causality tests are employed to check the robustness of the ARDL estimations. The ARDL-bounds testing approach indicated that all variables share a long-run connection. The long- and short-run ARDL estimations confirmed that crop production, as well as livestock production, has a significant positive effect on CO2 emissions in both cases. However, power consumption in agriculture and forest area has a negative effect on it, indicating that both variables reduce CO2 emissions in the long and short run. These results stood robust under various regression estimators and confirmed the findings of the ARDL method. Additionally, the results of the causality approach specified that a unidirectional causality is running from crop production, power consumption in agriculture, and forest area to CO2 emissions. The causality between livestock production and CO2 emissions is bidirectional. Therefore, the directions of this connection also validate the outcomes under various techniques used for robustness. These findings suggest that the government must reconsider its policies related to agricultural and livestock production and adopt environment-friendly practices in the agriculture sector that may reduce the carbon footprints in the long run.