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Coal consumption, CO2 emission and economic growth in China: Empirical evidence and policy responses

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  • Bloch, Harry
  • Rafiq, Shuddhasattwa
  • Salim, Ruhul

Abstract

This article investigates the relationship between coal consumption and income in China using both supply-side and demand-side frameworks. Cointegration and vector error correction modeling show that there is a unidirectional causality running from coal consumption to output in both the short and long run under the supply-side analysis, while there is also a unidirectional causality running from income to coal consumption in the short and long run under the demand-side analysis. The results also reveal that there is bi-directional causality between coal consumption and pollutant emission both in the short and long run. Hence, it is very difficult for China to pursue a greenhouse gas abatement policy through reducing coal consumption. Switching to greener energy sources might be a possible alternative in the long run.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 34 (2012)
Issue (Month): 2 ()
Pages: 518-528

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Handle: RePEc:eee:eneeco:v:34:y:2012:i:2:p:518-528

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Web page: http://www.elsevier.com/locate/eneco

Related research

Keywords: China; Coal consumption; Energy conservation; Cointegration; Error correction model;

References

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Cited by:
  1. Muhammad, Shahbaz, 2012. "Multivariate granger causality between CO2 Emissions, energy intensity, financial development and economic growth: evidence from Portugal," MPRA Paper 37774, University Library of Munich, Germany, revised 31 Mar 2012.
  2. Md. Al Mamun & Kazi Sohag & Md. Abdul Hannan Mia & Gazi Salah Uddin & Ilhan Ozturk, 2014. "Regional Differences in the Dynamic Linkage between CO2 Emissions, Sectoral Output and Economic Growth," Working Papers 2014-141, Department of Research, Ipag Business School.
  3. Muhammad, Shahbaz & Qazi Muhammad Adnan, Hye & Aviral Kumar, Tiwari, 2013. "Economic Growth, Energy Consumption, Financial Development, International Trade and CO2 Emissions, in Indonesia," MPRA Paper 43272, University Library of Munich, Germany, revised 10 Dec 2012.
  4. Shahbaz, Muhammad & Farhani, Sahbi & Ozturk, Ilhan, 2013. "Coal Consumption, Industrial Production and CO2 Emissions in China and India," MPRA Paper 50618, University Library of Munich, Germany, revised 12 Oct 2013.
  5. Satti, Saqlain Latif & Hassan, Muhammad Shahid & Mahmood, Haider & Shahbaz, Muhammad, 2014. "Coal consumption: An alternate energy resource to fuel economic growth in Pakistan," Economic Modelling, Elsevier, vol. 36(C), pages 282-287.
  6. Kyoung-Min Lim & Seul-Ye Lim & Seung-Hoon Yoo, 2014. "Oil Consumption, CO 2 Emission, and Economic Growth: Evidence from the Philippines," Sustainability, MDPI, Open Access Journal, vol. 6(2), pages 967-979, February.
  7. Muhammad, Shahbaz & Muhammad, Zeshan & Talat, Afza, 2012. "Is energy consumption effective to spur economic growth in Pakistan? new evidence from bounds test to level relationships and Granger causality tests," MPRA Paper 39734, University Library of Munich, Germany, revised 29 Jun 2012.
  8. Hooi Lean, Hooi & Huang, Wei & Hong, Junjie, 2014. "Logistics and economic development: Experience from China," Transport Policy, Elsevier, vol. 32(C), pages 96-104.
  9. Herrerias, M.J. & Joyeux, R. & Girardin, E., 2013. "Short- and long-run causality between energy consumption and economic growth: Evidence across regions in China," Applied Energy, Elsevier, vol. 112(C), pages 1483-1492.
  10. Chandran Govindaraju, V.G.R. & Tang, Chor Foon, 2013. "The dynamic links between CO2 emissions, economic growth and coal consumption in China and India," Applied Energy, Elsevier, vol. 104(C), pages 310-318.
  11. Wen, Xiaoqian & Guo, Yanfeng & Wei, Yu & Huang, Dengshi, 2014. "How do the stock prices of new energy and fossil fuel companies correlate? Evidence from China," Energy Economics, Elsevier, Elsevier, vol. 41(C), pages 63-75.
  12. Chandran, V.G.R. & Tang, Chor Foon, 2013. "The impacts of transport energy consumption, foreign direct investment and income on CO2 emissions in ASEAN-5 economies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 24(C), pages 445-453.

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