Environmental Kuznets curve for CO2 emissions in China: A spatial panel data approach

Abstract

Different from previous studies which mainly focused on conventional estimation techniques, this paper examines the CO2 EKC hypothesis of China using a spatial panel data model to avoid the coefficient estimation error covering the period of 1997–2012. Furthermore, a comparative analysis of the turning points between the non-spatial panel model and spatial panel model is conducted. The results show that the relationship between economic growth and CO2 emissions shapes as an inverted-N trajectory. Spatial spillovers effects are confirmed to affect the shape of the CO2 environmental Kuznets curve. There exists an apparent block distribution in spatial structure of China's provincial CO2 emissions. Specifically, CO2 emissions have a relatively sharp increase from the eastern regions to the central and the western regions of China. It has also been found that urbanization and coal combustion are main factors on increasing CO2 emissions. While the trade openness contributes to slight decrease in CO2 emissions. The government should make targeted carbon-reduction policies for CO2 emission reduction.