The Economic Analysis of Carbon Emissions: Evidence from China

Abstract

Transitioning away from coal supply is a cost-effective path to a low-carbon economy. Although many articles have considered the issue of manufacturers' production and emission of pollution. Few papers have discussed the interrelations among CO2 emissions, economic growth and coal supply on the cost of environmental degradation.This paper seeks to fill this gap by using some empirical tests including unit root, ARDL bounds test and impulse effect to check the causality among carbon emission, economic growth and coal supply The time series used in the model ranged from 1990 to 2016. We specifically take China as a case to analyze. The main results show that there exist only one-way positive causality between LGDP (dependent variable) and LCO2 (independent variable), in addition, we show China's GDP growth in recent years has gradually decoupled from CO2 emissions, in other words, the current growth of China's economy is not at the cost of worsening the environmental degradation, Furthermore, we outline that the generalized impulse response between LCO2 and LGDP is higher than that of LCOALSUPPLY and LGDP.