International Journal of Research in Environmental Studies
ISSN: 2059-1977
Vol. 7(1), pp. 1-16, August 2020
doi.org/10.33500/ijres.2020.07.001

Reconsidering the relationship between CO₂ emissions and economic growth: New evidence from China during 1990–2016

Yu Kun Wang* and Li Zhang

Guangdong Ocean University Cunjin College, Department of Economics and Finance, China.

*To whom correspondence should be addressed. E-mail: 3434337238@qq.com.

Received 30 April, 2020; Received in revised form 20 June, 2020; Accepted 24 June, 2020.

Keywords:
CO₂ emission, Regression discontinuity, Environmental protection tax, Environmental Kuznets hypothesis.

Coal use has caused the degradation of air quality. Since 2006, leading economies such as China and the United States have emitted more CO₂ than other countries have. According to the statistics of the International Energy Agency, China ranks first in CO₂ emissions in the world. Moreover, according to the data of the United Nations, China is the most populous country in the world. Therefore, attention should be paid to China's carbon emission problem. According to the environmental Kuznets hypothesis, the anthropogenic pressure on the environment is not expected to increase indefinitely as economy grows but to decrease when gross domestic product (GDP) exceeds a certain level. Researchers should examine whether China's CO₂ emissions have peaked and whether China's GDP growth is the main cause of the increase in its CO₂ emissions. The aforementioned topics are related to the global environmental economy and energy efficiency and thus deserve attention. To examine the relationship between environmental quality and economic growth, the variations in the aforementioned parameters in China over time were examined. In structural estimation, the environmental Kuznets hypothesis and regression discontinuity test were used to empirically demonstrate that the environmental Kuznets curve has an upward slope; thus, although pollution increases with income, the slope of the pollution versus income graph is less than 1 and becomes more concave over time. This phenomenon can be largely attributed to the 1997 Asian financial crisis, which played an important role in the formation of an inverse U-shaped relation between China's economic growth and CO₂ emissions.

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