Empirical Analysis the Relationship between Industrial Economic Development and Environment Pollution During 1994-2015 Based VAR

Abstract

Based on the yearly datum of the industrial added value during 1994-2015 in China, as well as the amount of discharge for industrial SO2, industrial COD, and industrial solid wastes, based on VAR model, Johansen co-integration tests, Granger causality tests, impulse response and variance decomposition, with qualitative analysis, the thesis studies the relationship between the industrial economic development and environment pollution. The results show that, among the industrial added value, and the ICOD, ISW, there existing stable co-integration relationship in the long run. The influence on the industrial economic development of the three environment pollution indexes, of which in period t, the discharge of industrial SO2 is the largest with the positive relationship; followed by industrial COD in period t-1, with the negative relationship; and industrial solid wastes in period t-1 is the least with the positive relationship. Between the industrial SO2 and the industrial added value, there no Granger causality relationship; the industrial added value Granger Caused the industrial COD and the industrial solid wastes. The industrial economic development exerts greater influence on the industrial COD and the industrial solid wastes, and its positive impact is gradually strengthening. The industrial COD and the industrial solid wastes have less influence on the industrial economic development with a certain lag.