IMPACT OF CARBON TAXES, ECONOMIC GROWTH, GLOBALIZATION, FOREST RENT, INFLATION AND URBANIZATION ON SUSTAINABLE DEVELOPMENT IN CHINA

Abstract

The study’s objective was to investigate the impact of carbon taxes, economic growth, globalization, forest rent, inflation, and urbanization on sustainable development in China. The study has used secondary data from World Development Indicators and International Energy Association from 1992 to 2020. For data analysis, the study has employed panel unit root analysis, panel cointegration analysis, Hausman test, and random-effect OLS technique for data analysis. The results showed that forest rent was significantly related to sustainable development. Moreover, the natural logarithm of GDP has negative and urbanization has a positive impact on sustainable development. On the other hand, inflation has an insignificant but negative impact on sustainable development. Also, globalization and carbon taxes have a positive impact on sustainable development. The study concluded that higher carbon taxes have proved to be a boom for sustainable development solutions in China. The results indicated that with the slow and gradual increase in the level of carbon taxes, the emissions of carbon dioxide will be reduced to varying degrees. The study found that among the six variables, carbon taxes have the most significantly strong impact on sustainable development followed by globalization, forest rent, and urbanization whereas gross domestic product and inflation have a negatively significant impact on sustainable development.