CORRELATION BETWEEN CO2 EMISSIONS AND GASOLINE TO DIESEL RATIO: EVIDENCE FROM CHINA PROVINCES

摘要

This paper utilizes 1997-2016 provincial panel data in China to verify Environmental Kuznets Curve (EKC) for Carbon Dioxide (CO2) emissions, and to explore the underlying reason of EKC hypothesis. The correlation between CO2 emissions and Gasoline to Diesel Ratio (GDR) is also been investigated. The regression result shows per capita CO2 emissions forms an inverted U-shape curve with respect to per capita Gross Domestic Product (GDP). But because the current data of per capita CO2 emissions have not shown a decreasing yet, so the hypothesis of EKC for CO2 emissions is just partially proven. Other result shows CO2 emissions has a high correlation with GDR. By panel Fully Modified Ordinary Least Squares (FMOLS) and panel Dynamic OLS (DOLS) regression, 1% GDR increase couples with 0.118186% or 0.114056% CO2 emissions decrease, respectively. This paper also demonstrate that whether the EKC holds is independent from provincial GDP per capita. So it is not the GDP, but the provincial economic structure, energy structure and their interaction, determined the provincial differences of correlation between per capita GDP and CO2 emissions.