Interactions among electricity consumption, disposable income, wastewater discharge, and economic growth: Evidence from megacities in China from 1995 to 2018

Abstract

The 2030 Agenda for Sustainable Development clarifies Goal 11 to make cities sustainable. Understanding the interacting relationships is the key to effective policies and addressing sustainable urban development. This paper aims to expand the research on the interactions between electricity consumption, disposable income, wastewater discharge, and economic growth. We apply the fully modified ordinary least square (FMOLS) and vector error correction model (VECM) in a panel of 14 Chinese megacities from 1995 to 2018. The main conclusions are as follows: (1) The decrease in efficiency of electricity consumption in these cities will reduce average disposable income and increase the intensity of wastewater discharge; (2) In turn, the increase of wastewater discharge intensity will also reduce the power efficiency; (3) The development of these cities is still at the cost of polluting the water environment; (4) There is a sign of decoupling of economic growth and electricity consumption in these cities; (5) The Environmental Kuznets Curve can be established in these cities for industrial wastewater discharge. Accordingly, we propose policy implications in avoiding negative interactions that hinder sustainable development.