The Impact of Economic Growth, Energy Consumption and Trade Openness on Carbon Emissions: An Empirical Analysis in China

摘要

The study aims to test the long-run cointegration relationship and causality among China's carbon emissions, economic growth, energy consumption and trade openness for the period 1971-2013. Autoregressive Distributed Lag (ARDL) model incorporating with structural breaks and Vector Error Correction Model (VECM) Granger causality test are applied in this study. The empirical results reveal that inverted-U shape relationship exists between carbon emissions and economic growth in the long-run, but it doesn't hold in short-run, proving that Environmental Kuznets Curve (EKC) is a long-run phenomenon rather than short-run. Moreover, energy consumption and trade openness are found to have positive impacts on carbon emissions in the long-run and short-run. As for causality test the result showed that bi-directional causal relationship exists between energy consumption and carbon emissions in the long-run. In the short-run, unidirectional causality is found running from trade openness to carbon emissions.