Abstract
The non-linear relationship between provincial economic growth and carbon emissions is investigated by using panel smooth transition regression (PSTR) models. The research indicates that, on the condition of separately taking Gross Domestic Product per capita (GDPpc), energy structure (Es), and urbanisation level (Ul) as transition variables, three models all reject the null hypothesis of a linear relationship, i.e., a non-linear relationship exists. The results show that the three models all contain only one transition function but different numbers of location parameters. The model taking GDPpc as the transition variable has two location parameters, while the other two models separately considering Es and Ul as the transition variables both contain one location parameter. The three models applied in the study all favourably describe the non-linear relationship between economic growth and CO2 emissions in China. It also can be seen that the conversion rate of the influence of Ul on per capita CO2 emissions is significantly higher than those of GDPpc and Es on per capita CO2 emissions.
Highlights
Since the implementation of the reform and opening-up policy, the Chinese economy has developed rapidly and China has become the largest developing country and the second biggest economic entity in the world
This study investigated a possible non-linear relationship between economic growth and CO2 emissions in China fitted using the panel smooth transition regression (PSTR) model
The main results were as follows: for the PSTR model taking GDP per capita (GDPpc), energy structure (Es), and urbanisation level (Ul) as thresholds, the influences of the three factors on per capita CO2 emissions exhibited non-linear panel smooth transition characteristics
Summary
Since the implementation of the reform and opening-up policy, the Chinese economy has developed rapidly and China has become the largest developing country and the second biggest economic entity in the world. Excessive consumption of energy and mass emission of pollutants are causing sustained environmental pollution and eco-deterioration in China as a result of this growth. China bears huge responsibilities for environmental protection during such economic development. The panel smooth transition regression (PSTR) model proposed by González et al [1] is applied to investigate the relationship between economic growth and carbon emissions in China. The innovations of this study is using this model to examine the non-linear relationship under different transition variables. Whether a non-linear relationship exists between the two factors is verified and the transition rates on the condition of taking various variables as thresholds are investigated. The rest of study is organised as follows: Section 2 contains a literature review, Section 3 summarises the models used and the data therefrom, Section 4 summarises the empirical results, and Section 5 draws the conclusions
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