Environmental Kuznets curve hypothesis for sub-elements of the carbon emissions in China

Abstract

The purpose of this paper was to investigate the validity of the environmental Kuznets curve (EKC) hypothesis for the period between 1977 and 2013 by using the sub-elements of carbon (CO2) emissions in China. To this end, the fully modified ordinary least squares and pairwise Granger causality methodologies have been employed. As a result, it is found that financial development leads to an improvement in environmental performance in China for many kinds of pollution, including the following: liquid fuel pollution, solid fuel pollution, residential buildings and commercial and public services pollution, and electricity and heat production pollution. The findings indicate that an increase in per capita consumption of energy will lead to an increase in eight different sub-elements of the carbon emissions. The highest impact is for per capita CO2 emissions and the lowest impact is for liquid fuel CO2 emissions. The findings also suggest that the EKC hypothesis is valid for CO2 emissions from gaseous fuel consumption, liquid fuel consumption, solid fuel consumption and transportation. However, the EKC hypothesis is not valid for aggregate CO2 emissions, CO2 emissions from residential buildings and commercial and public services, from electricity and heat production and from manufacturing industries and construction.