The impact of hydropower energy consumption on economic growth and CO2 emissions in China.

Abstract

The present study empirically investigates the impact of hydropower energy consumption on economic growth and CO2 emissions in China, spanning the period 1965-2016. Using the ARDL bounds testing approach to cointegration, this study confirms the existence of a long-run relationship among the variables. Moreover, hydropower energy consumption has a positive impact on economic growth, while CO2 emissions have a long-run negative impact on economic growth. However, economic growth and CO2 emissions have a positive impact on hydropower energy consumption. Further, the study failed to provide a support of the environmental Kuznets curve (EKC) hypothesis for China. The Granger causality test reveals that there is a unidirectional causality running from hydropower energy consumption to economic growth. Furthermore, there is a bidirectional causality among the hydropower energy consumption, economic growth, and CO2 emissions in the long run. Given these findings, we argue that hydropower energy consumption is considered as the driving force to enhance the economic growth in China.