Carbon Emissions, Economic Growth, Urbanization, and Foreign Trade in China: Empirical Evidence from ARDL Models

Abstract

Based on the autoregressive distribution lag (ARDL) model, this paper conducts an empirical study on the relationship between carbon emissions, economic growth, urbanization, and foreign trade in China from 1971 to 2020. The results show that when carbon emissions, economic growth, and urbanization are used as explained variables, there is a long-term cointegration relationship with other variables. In the long-term relationship, urbanization has a significant positive effect on economic growth and carbon emissions, with coefficients of 2.2172 and 0.2921, respectively. The long-term elasticity coefficient of economic growth to urbanization is 0.4864, passing the 1% significance test. In the short-term relationship, economic growth and carbon emissions, urbanization and carbon emissions, and economic growth and urbanization are all mutually reinforcing relationships, and foreign trade will suppress carbon emissions in the short term. Therefore, policymakers should transform the urbanization model and develop a green economy to achieve environmental sustainability.