Abstract
With the Paris Agreement coming into effect, China, as the largest CO2 emitter in the world, will be facing greater pressure to reduce its carbon emissions. This paper discusses how to solve this issue from the perspective of financial development in China. Although many studies have analyzed its impact on carbon emissions, the conclusions are contradictory. A major criticism of the existing studies is the reasonability of the selection of appropriate indicators and panel estimation techniques. Almost all studies use only one or limited indicators to represent the financial development and ignore the cross-sectional dependence. To fulfil the gaps mentioned above, a financial development index system is built, and with the framework of the STIRPAT (Stochastic impacts by regression on population, affluence, and technology) model, this paper applies an ARDL approach to investigating the long-run relationship between financial development and carbon emissions and a dynamic panel error-corrected model to capture the short-run impact. The empirical results show that financial development can improve carbon emissions, and such impact not only shows a regional difference but also reflects the features of stage differences. Additionally, based on the discussion on seven specific aspects of financial development, our findings can be helpful for policy makers to enact corresponding policies to realize the goal of reducing carbon emissions in China.
Highlights
The notion that only developed countries face environmental degradation is invalid, at least in terms of consequences, because the greenhouse gases have an enormously negative impact on both developing and developed countries regardless of the source of the gases [1]
In this paper, we investigate the relationship between the carbon emissions and the seven detailed aspects of financial development: financial size (FSZ), financial structure (FST), financial openness (FOP), financial depth (FDP), financial growth (FGR), financial efficiency (FEF) and financial ecology (FEC)
What is worth noticing is that the financial development of Liaoning ranks 3rd; in 2010, it ranked 23rd, which reflects a Figure 3II demonstrates that the carbon emissions intensity (CEI) of Ningxia is nearly three times larger than that of Guangdong
Summary
The notion that only developed countries face environmental degradation is invalid, at least in terms of consequences, because the greenhouse gases have an enormously negative impact on both developing and developed countries regardless of the source of the gases [1]. The burning of fossil fuels and human activities results in a large increase in the concentration of greenhouse gases, which causes the extreme climate events and seriously deteriorates living conditions for humans [2]. Global warming will aggravate destruction of the environment, which will result in a more frequent and lasting extreme climate, such as tornadoes and droughts. Climate change is greatly challenging the sustainability of human society and threatening human health, causing respiratory disease and malnutrition [4]. According to Global Carbon Projects [5], the total amount of carbon emissions and carbon emissions per capita is 36 billion tons and 5 tons, respectively, which set a new historical record
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Environmental Research and Public Health
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
