Increase in the greenhouse gases (GHGs) such as carbon dioxide (CO2) are responsible for environmental problems like global warming and climate change. This study applies the Stochastic Impact by Regression on Population, Affluence and Technology (STIRPAT) framework to analyse the impact of population, economic growth, economic development, urbanization, and energy use on per capita carbon emissions for India and China. Environmental Kuznets Curve (EKC) hypothesis is also tested within the STIRPAT framework. A time series analysis is done from 1980 to 2019 for China and India. Through application of Auto Regressive Distributed Lag (ARDL) Model, we found the existence of EKC for China and India. Results further show that population and energy use is positively related to CO2 discharges. In case of India, urbanization positively affects CO2 discharges whereas for China our findings show that urbanization helps in reducing CO2 discharges. However, domestic loan to private sector has resulted in environmental degradation in case of both countries.
CITATION STYLE
Mahmood, T., Shireen, S., & Mumtaz, M. (2021). Testing the role of financial development and urbanization in the conventional EKC: Evidence from China and India. International Journal of Sustainable Development and Planning, 16(3), 445–455. https://doi.org/10.18280/IJSDP.160305
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