Can CO2 Emission Reduction and Economic Growth Be Compatible? Evidence From China

Abstract

The influence of low-carbon energy on economic development is a vital issue. Using the provincial panel data in China from 2000 to 2017, this work investigated the aggregate effects of low-emission electricity. The results showed that 1) when the ratio of low-emission electricity to total electricity increases by 1%, the GDP per capita will increase by 0.16% and CO2 emissions will decrease by 0.848%. In other words, low-emission electricity can achieve the goal of low-carbon economic development; 2) the self-supply of low-emission electricity, rather than trade and efficiency, is the main reason for China’s boosted economic growth; and 3) low-emission electricity increases the regional economic gap in China. The effects of pollution inhibition and economic promotion on low-emission electricity in developed areas are significantly greater than those in less developed areas. Thus, the low-emission electricity policy in China should benefit the economy and avoid the excessive economic gap among regions. Policymakers should vigorously promote the low-emission electricity revolution and pay attention to the inclination of energy policy to the central and western regions.