Investigating the Dynamic Association Among CO2 Emission, Energy Use, and Economic Growth: Evidence From China

Abstract

Environmental pollution and climatic variations are due to CO2 emissions and considered an important global issue. The key aim of this study was to investigate the dynamic association among CO2 emission, energy use, and economic growth in China. Secondary data was used in this study ranging from 1971 to 2014, and data stationarity was verified by applying the Augmented Dickey-Fuller unit root test. The autoregressive distributed lag (ARDL) bounds testing approach and Granger causality test with vector error correction model was used to check the causal connection amid the study variables. Outcomes expose that energy use, economic growth and gross domestic product has positive coefficients through long-run analysis with p-values (.062), (.000), and (.100), respectively, that validate the significant association with CO2 emission. Furthermore, the outcomes of short-run analysis also uncover that energy use, economic growth, and gross domestic product have a significant association with CO2 emission in China. Potential conservative policies are needed from the Chinese government to reduce CO2 emissions and resources to resolve the problem without impacting the economic progress.