An Empirical Investigation Between CO2 emission, Energy Consumption, Export and Economic growth: A Case of China
AbstractThe purpose of this study is to examine the long-run and short-run relationship between environmental degradation (proxied by C02 emission), gross domestic product, energy consumption and exports in China over the period from 1971 to 2014, using time-series analysis. The study used the annual data which was obtained from a World Development Indicator of the World Bank. The Augmented Dickey-Fuller and Phillips-perron test is applied in this study to establish the stationarity among datasets. Their results show that all variables were non-stationary at level (I(0)). However, they became stationary at the first difference (I(1)). Base on the findings, a well-defined Autoregressive Distributed Lag Model (ARDL) was applied to the datasets, and the results were in support of the long-run and short-run relationships among the variables. C02 emission and exports accelerate economic growth, however, energy consumption has an inverse impact on economic growth; economic growth and energy consumption also play a significant impact on C02 emission whereas export has a significant negative impact. Furthermore, the granger causality test shows the existence of bi-directional causality between exports and economic growth. A unidirectional causality is running from energy consumption and C02 emission to economic growth as well as energy consumption and C02 emission to exports. The findings support that C02 emission and exports have a substantial impact on the economic growth of China. Furthermore, energy use and economic growth accelerate C02 emission. This study concludes with an examination of the policy implications of the findings.
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