Urbanization’s short-and long-term effects on CO2 emissions: evidence from China

Abstract

It is necessary to investigate the nexus of China’s urbanization and carbon emissions, in order to better understand China’s carbon emissions abatement target. Urbanization’s impact on carbon dioxide (CO2) emissions has hysteretic effects, it takes time to fully materialize. Knowing this is helpful for policymakers to better coordinate CO2 mitigation and development. To this end, this study takes the panel data of 30 provinces/cities in China from 1995 to 2015 and applies the dynamic spatial panel data model to empirically analyze the short- and long-term effects of urbanization on CO2 emissions. The application of the novel approach brings some new discoveries: there exist spatial and time lag effects in China, in terms of CO2 emissions; urbanization progress has beneficial spatial spillover effects on CO2 abatement in both the short and long run; energy intensity also exerts significant short- and long-term directs as well as spillover effects on CO2 emissions; on the contrary, FDI and industrial structure have no significant impacts on CO2 emissions in China.