Decoupling of emissions and GDP: Evidence from aggregate and provincial Chinese data

We provide a comprehensive analysis of the relationship between greenhouse gas (GHG) emissions and GDP in China using both aggregate and provincial data. The trend or Kuznets elasticity is about 0.6 for China, higher than that in advanced countries but below that of major emerging markets. The elast...

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Bibliographic Details
Published in:Energy economics 2019-01, Vol.77, p.105-118
Main Authors: Cohen, Gail, Jalles, Joao Tovar, Loungani, Prakash, Marto, Ricardo, Wang, Gewei
Format: Article
Language:English
Subjects:
Aggregate data
Air pollution
China
Consumption
Decoupling
Economic models
Elasticity
Emerging markets
Emissions
Energy economics
Environmental Kuznets Curve
Environmental Okun's Law
GDP
Greenhouse effect
Greenhouse gases
Gross Domestic Product
Markets
Pollution
Provinces
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Summary:We provide a comprehensive analysis of the relationship between greenhouse gas (GHG) emissions and GDP in China using both aggregate and provincial data. The trend or Kuznets elasticity is about 0.6 for China, higher than that in advanced countries but below that of major emerging markets. The elasticity is somewhat lower for consumption-based emissions than for production-based emissions, providing mild evidence consistent with the “pollution haven” hypothesis. The Kuznets elasticity is much lower for the last three decades than for the three previous decades, suggesting a longer-term trend toward decoupling as China has become richer. Further evidence of this comes from provincial data: richer provinces tend to have smaller Kuznets elasticities than poorer ones. In addition to the trend relationship, we find that there is a cyclical relation also holding in China. •We provide an analysis of the relationship between greenhouse gas emissions and GDP in China.•We use both aggregate and provincial data.•The trend or Kuznets elasticity is 0.6 for China, below that of major emerging markets.•The elasticity is lower for consumption-based emissions than for production-based emissions.•The Kuznets elasticity is lower for the last three decades than for the three previous decades.•Richer provinces tend to have smaller Kuznets elasticities than poorer ones.•We also find that there is a cyclical relation also holding in China.
ISSN:0140-9883
1873-6181
DOI:10.1016/j.eneco.2018.03.030