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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.

Suggested Citation

  • Bloch, Harry & Rafiq, Shuddhasattwa & Salim, Ruhul, 2012. "Coal consumption, CO2 emission and economic growth in China: Empirical evidence and policy responses," Energy Economics, Elsevier, vol. 34(2), pages 518-528.
  • Handle: RePEc:eee:eneeco:v:34:y:2012:i:2:p:518-528 DOI: 10.1016/j.eneco.2011.07.014
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