Empirics on linking industrial agglomeration, energy consumption, residential construction sector growth, and environmental sustainability.

Abstract

We looked at the long-term and short-term diversifiedrelationships between industrial agglomeration, aggregate energy consumption, residential construction sector growth, and air pollution in China's 30 provincial units from 2004 through 2020. We contributed to the existing knowledge by calculating a holistic air pollution index (API) and applying advanced methods. We also augmented the Kaya identity by including industrial agglomeration and residential construction sector growth in the baseline framework. Based on empirical results: First, we revealed long-term stability among our covariates through panel cointegration analysis. Second, we uncovered a positive bilateral relationship between residential construction sector growth and industrial agglomeration in the long and short term. Third, we unfolded a unilateral positive correlation emerging from aggregate energy consumption to API, displaying the greatest influence in the east zone of China. Fourth, we observed a unilateral positive connection stemming from industrial agglomeration and residential construction sector growth to aggregate energy consumption and API in the long- and short-term dimensions. Finally, the linking nature was homogeneously prevailing across the long term and short term; however, the long-term impact size outweighed that of the short term. Given our empirical results, useful policy insights are discussed to provide the readers with a take-home message for substantiating sustainable development goals.