Examining CO2 Emissions, Health Expenditure, and Economic Growth Nexus for China: A Co-integration Approach

Abstract

This study most importantly illustrates the long-run and short-run shocks between the three key variables of environmental pollution, health factors and economic development. The highly industrialized situation in China has caused a lot of energy consumption and a healthy decline. Therefore, this study examines the relationship between China’s health expenditure and CO2 emissions taking into account economic growth using the bootstrap ARDL test variable. The results show that the long-term CO2 emissions and medical costs have a critical impact on China’s economic development. On the other hand, this study found that there is a two-way causal relationship between China’s health expenditure and economic growth, as well as two-way causation between health expenditure and CO2 emissions. But the impact of the economy on the environment is only one-way causality. Therefore, our research has important policy implications for China to develop energy plans and strategies to reduce carbon dioxide emissions and protect human health.